In this paper, we present alternative pricing models of deposit insurance under capital forbearance. The investment behavior of deposit insurance companies and moral hazard of banks are considered and numerical analysis is carried out. We find that If the premium rate reflects forecasting...

We discuss the risk-based valuation model for deposit insurance. We establish models of determining the premium rate of deposit insurance considering the deductibles, the investment activities of the deposit insurer, and the requirements of capital regulation. Based on the criterion of safety...

In this article, we discuss whether and when the risk taking and moral hazard is beneficial to the insured and to the society as well. We establish model by stochastic optimal control theory. We obtain the optimal levels of risk taking and moral hazard from perspectives of the insured and the...