Document Type



Deposit Insurance, the Implicit Regulatory Contract, and the Mismatch in the Term Structure of Banks' Assets and Liabilities (with Geoffrey P. Miller), 12 Yale Journal on Regulation 1 (1995)


Professors Macey and Miller explore the relationship between deposit insurance and the mismatch in the term structure of commercial banks I assets and liabilities. After critiquing the traditional regulatory hypothesis, which posits that banks have incentives long-term assets with short-term liabilities because government-sponsored deposit insurance enhances bank credit and subsidizes short-term liabilities, they use public choice theory to argue that a modified version of the regulatory hypothesis is the best explanation for the mismatch in the term structure of banks I assets and liabilities. Finally, they argue that embracing the regulatory hypothesis does not imply acceptance of the government-sponsored deposit insurance scheme as it exists in the U. S. today.

Date of Authorship for this Version


Included in

Law Commons