Narrow Results

In this chapter, we propose the structural model in terms of the Stair Tree model and barrier option to evaluate the fair deposit insurance premium in accordance with the constraints of the deposit insurance contracts and the consideration of bankruptcy costs. First, we show that the deposit insurance model in Brockman and Turle (2003) is a special case of our model. Second, the simulation results suggest that insurers should adopt a forbearance policy instead of a strict policy for closure regulation to avoid losses from bankruptcy costs. An appropriate deposit insurance premium can alleviate potential moral hazard problems caused by a forbearance policy. Our simulation results can be used as reference in risk management for individual banks and for the Federal Deposit Insurance Corporation (FDIC).

In this paper we study the phenomenon of non concentration of curvature of level curves of two variable complex analytic function germs, and we characterise it in terms of tree models and topological types. In addition, we also discuss the relationship in the real case, between the phenomenon of non concentration of curvature and real tree models (or blow-analytic types). In particular, we give an example to demonstrate that the corresponding characterisation does not hold in the real case.