Regression analysis reveals significant effects of deposit insurance on banking stability, suggesting essential factors in risk management.
Background: Insurance management is an important tool for minimizing creditors’ and borrowers’ risks, which is especially relevant in the face of increased macroeconomic risks. The aim of the study was to assess the impact of deposit and credit risk insurance on the financial stability indicators of the banking system. Methods: The research employed regression, correlation analysis and analysis of the dynamics of statistical indicators. Results: The study revealed a significant impact of deposit insurance on the banking system stability at the global level. The largest impact with a regression coefficient of 1.8991 is made by the Differential Rate indicator on the Net Interest Margin. Accordingly, the insurance rate used in the country affects the profitability of banks in the context of their main activity - granting loans and attracting deposits. Conclusions: Analysis of credit risk insurance for Ukraine showed a close correlation between the volume of insurance premiums and payments and indicators of the national banking system stability. The findings prove a significant role of insurance management in ensuring the banking system stability and can have practical benefits. The practical significance of the study is the identified main factors influencing the banking system in the context of risk insurance.
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Al-Ababneh et al. (2025) studied this question.
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