Deposit Insurance: Believers and Doubters

We uncover polarized beliefs about the credibility of deposit insurance using data from a large fintech company that offers “guaranteed” Euro term deposits from European banks. Choosing between countries, 11% of their German investors, "Believers," always choose the highest rate, whereas 67%, "Doubters", never do. Choosing within a country, most investors choose the highest rate. Doubters are older, have less trust in the European Central Bank, and live in the former East Germany. We explain these results with a model where Believers trust the deposit insurance of all countries, but Doubters invest only in countries whose deposit insurance they trust.

• เอกสารนำเสนอ
• Working paper