Abstract
The main goal of the deposit guarantee scheme is to prevent banking panic and consequently to prevent banking crises. The purpose of the article is to check whether the knowledge of depositors about the existence of a deposit guarantee scheme and about the terms of the guarantee affects the propensity to bank run. Thus, the presented study emphasizes that the effectiveness of the deposit guarantee scheme is dependent on the degree of knowledge about the principles of its functioning in society. The results of 200 CATI interviews suggest that this knowledge does not affect the decision to run on a bank, but determines the run type. People with higher knowledge about the principles of deposit guarantee are more likely to make a non-cash form of run (transfer of funds to another bank). For people with less knowledge the cash withdrawal is dominant. Due to the finite cash resources in bank branches, the cash withdrawal form can increase the scale of the run through its mediality.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
