Polish paper examines banks’ risks when state safety net grows
Banks take higher levels of risk when backed by more extensive deposit insurance scheme and state aid, according to a National Bank of Poland working paper.
However, during a financial crisis, the "diverse influence of broadening the safety net may decrease" as banks' risk levels become "less dependent on formal safety net features".
The paper, The influence of regulatory and institutional framework and shareholder structure upon risk of financial institutions in Central Europe, by Dorota Skała
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