2024 John W. Ryan Award Winner Announced

The Community Banking Research Conference research committee is pleased to announce the selection of “The Economics of Market-Based Deposit Insurance” as the paper chosen for the "John W. Ryan Award for Most Significant Contribution to Community Banking Research" as part of the 2024 Community Banking Research Conference.

The authors of the winning paper are: 

• Edward Kim, University of Michigan-Ann Arbor
• Shohini Kundu, UCLA
• Amiyatosh Purnanandam, Ross School of Business, University of Michigan

Here are the key findings from the paper: 

The authors examine the financial stability implications of deposit insurance using a recent financial innovation that has emerged as an important source of funding for U.S. banks: reciprocal deposits. They show that the enhanced insurance coverage resulting from participation in a reciprocal deposit network allowed these banks to retain deposits following the 2023 banking crisis. Further, network banks pay lower interest rates on their deposits, indicating depositors are willing to trade off return for higher insurance access. This enhanced coverage also has implications for competition and risk-taking, as the authors find evidence that network banks grow larger and increase their exposure to interest rate risk.