Depositors' Risk Perceptions and Bank Failure in a System With Co-operative Loan Support

By

Anthony Saunders

Conten t s : I. Introduction. -- II. The U.K. Banking Crisis. -- I I I . The Model. -- IV. The Empirical Results. -- V. Conclusions.

I. Introduction

T here is a growing literature on the causes and effects of bank failure

in the U.S. [see for example Sinkey, I978; Altman, Sametz, I977]. However, little attention has been focused on bank failures or crises

in other countries. This is unfortunate, since there are considerable inter- country differences between banking systems and how bank failures are handled. For example, banking in the U.K., Canada and Austral ia is a far more centralized and concentrated industry than in the U.S., with a few domestic mult i-branch banks dominating tile retail sector 1. The concentrated nature of these banking systems has often resulted in very close links (including co-operation in joint rescues) between the regulators and the regulated.

The objective of this paper is to analyze the effects, on depositors ' confidence, of a banking crisis tha t developed in the U.K. over the period i973--i974. This crisis is now agreed to have been the worst suffered in the U.K. since the great depression [Bank of England, I978, para 26]. Near ly th i r ty small banks found themselves in severe financial difficulties and eventually eight ended in the hands of the receiver or in liquidation [ibid., Appendix I]. The Bank of England 's response to this crisis was to organize a support operation, the so-called lifeboat fund, with the aid of funds from the large (multi-branch) domestic Clearing banks. The role of this co-operative fund was to identify problem banks, and where feasible, to give support b y re-cycling deposits or making shor t - term loans. The risks of this operation were shared on an agreed formula, based on Clearing bank size. The lifeboat operation began in J a n u a r y I974. In the first year of the operation alone, more than ~i,2oo million were extended in loans to problem banks [ibid.].

Remark : The a u t h o r wou ld l ike to t h a n k a n a n o n y m o u s referee for h is he lpfu l c o m m e n t s .

See S a u n d e r s a n d W a r d [x976] for a d i scuss ion of the s t r u c t u r e of the U . K . b a n k i n g

sys tem,

544 A n t h o n y S a u n d e r s

The Bank of England [1978 ] has argued tha t the rationale for this operation was to restore depositors' confidence in the banking system, and that the lifeboat was total ly successful in achieving this purpose. However, there has been no firm evidence to support this contention. An interesting empirical question is the extent to which depositors' confidence was restored by the lifeboat operation; especially the con- fidence of those investors in the wholesale money markets who provided most of the deposits of the small problem banks. The success of the lifeboat operation is also important in view of the fact tha t after the crisis the U.K. government approved the passage of the Banking and Credit Union Bills in 1978 which formalized future support operations on the lines of the lifeboat 1. The success of this type of government-private-sector co- operative lending (or bail-out) scheme can also usefully be compared to the recently introduced Capital Assistance plan for the financially troubled thrift institutions in the far more decentralized U.S. banking system. Under the 1982 Depository Institutions Act Federal regulators sought to bolster large depositors' confidence in the safety of "failing" institutions by emergency infusions of capital in return for promissory or IOU notes from these institutions. For example, thrifts with net worth under 3 percent of their insured liabilities were eligible for capital assistance equal to half of their losses over the preceding six months with this pro- portion rising to 7 ~ percent when net worth fell to t percent. In this case there was no at tempt made to use the funds of profitable commercial or savings banks to subsidize those of failing banks. Instead, the subsidy is being provided (indirectly) by general taxpayers.

Section II of this paper briefly discusses the history of the U.K. banking crisis. Section I I I develops a model which seeks to measure depositors' risk perceptions, and hence confidence in the U.K. banking system, over the period of the support operation. Section IV discusses some empirical tests of this model. Finally, a conclusion summarizes the findings and discusses some policy implications.

II. The U.K. Banking Crisis

The intoduction of the Bank of England's [I97I ] Competition and Credit Control reforms in October 1971 resulted in vigorous competition for sterling deposits between the traditional banking sector (the Clearing banks) and a growing group of secondary or fringe banks ~. Most of this

1 This paper does no t ful ly explore the o p t i m a l i t y of t h i s legis la t ion . Th i s ha s been ade- qua te ly discussed e lsewhere [see Hind le , 1978 ].

For a full d iscuss ion of the def in i t ional n a t u r e of a secondary or f r inge b a n k , see B a n k of E n g l a n d [x978 , pa ra s 6 - - i 3 ] .

Risk Perceptions and Bank Failure 545

competition took place in the wholesale or money markets through the sale of large sterling C. D.'s and purchase of inter-bank deposits. Initially, the secondary banks were able to withstand Clearing bank competition, as a major part of their business had been to provide medium- and long- term loans to companies engaged in the then booming proper ty market. Consequently, many secondary banks chose to adopt largely undiversified and unhedged portfolios consisting mainly of short- term money market deposits on one side of the balance sheet, and proper ty sector loans on the other. By the end of 1973 this asset-liability structure proved to be un- tenable as the property boom came to an end and the U.K. economy moved into a severe recessionary phase. This put a great deal of pressure on property company cash flows, and on their abili ty to meet contractual dates for the repayment of loans to the secondary banks. While many secondary banks were initially prepared to roll-over these loans, their cash flow problems began to be reflected by an increasing unwillingness of money market investors to re-deposit their funds with this group of banks.

In November 1973 London and County, one of the largest of these secon- dary banks, found itself unable to renew a large proportion of its money market deposits. The associated publicity was followed by a run on the bank by its smaller depositors. The ensuing panic quickly spread to other secondary banks, so that by the end of 1973 a major banking collapse became a real possibility, especially since there was genuine fear tha t the crisis of confidence could spread to the five big London Clearing banks, and eventually to the whole payments mechanism itself 1. The Bank of England's response to the crisis was to organize, in January 1974, an emergency or lifeboat operation with the aid of Clearing bank funds. Under this lifeboat scheme a committee was set up to identify problem banks, and to provide support, on a risk-sharing basis, in the form of re-cycled deposits or temporary loans. The major phase of this support operation was January to March 1974 when 21 banks were identified as needing support. Eventual ly funds amounting to more than s 1,2oo million were provided to problem banks, reaching a peak in August 1974.

Since then a large proportion of these funds has been repayed, although a number of problem banks ended up in receivership or in liquidation, and in certain cases actually were taken over by the Bank of England itself (as in the case of Slater Walker Bank). The next section outlines a model which makes it possible to test the reactions of depositors in the money markets to the Bank of England's lifeboat operation. The major hypothesis is that a successful, confidence-restoring intervention would have resulted

For example, during the crisis, National Westminster Bank, the second largest Clearing bank, had to issue a public denial of t he r u m o r that it was receiving support from the Bank of England.

Weltwirtschaftliches Archiv Bd. CXIX. 36

546 A n t h o n y S a u n d e r s

in reduced risk premia being demanded on money-market deposits. Empirical support for this hypothesis would provide evidence in favor of the Bank of England's contention [1978, para 49] that the lifeboat fund was completely successful in restoring depositors' confidence.

III. The Model

In the finance literature it is usual to explain the yield on fixed income securities as being equal to some risk-free rate, reflecting investors' time-preference, plus a premium tha t measures (i) investors' per- ceptions of the expected loss due to issuer default, (ii) the matur i ty of the security, (iii) its marketability, and (iv) the nature of government taxa- tion [see Fisher, i959; Silvers, 1973; Johnson, I967; Benson, Rogowski, I978].

In our case we are interested in very short-term instruments, bank C.D.'s and inter-bank deposits, which have similar maturities to the risk-free asset (assumed here to be three-month U.K. government Treasury billsl), as well as being subject to similar treatment for taxation purposes. Consequently, the expected loss due to issuer default and asset market- ability are likely to be the most important factors in determining risk premia on money-market deposits.

While it might be argued that the expected default loss on C.D.'s and inter-bank deposits will normally be small [see Macauley, I938 ], since this type of risk is usually regarded as being an increasing function of asset maturity, in crisis periods near-term default expectations can be very large. This is due to the well-known phenomena of "crisis of maturi ty ''~. In periods of crisis, uncertainty regarding the issuers' (banks') ability to refinance borrowed funds or to have sufficient cash flow to repay principal plus interest, will be reflected in an increased premium being demanded by investors to hold short-term securities. A number of years ago Harold [1938 ] described a crisis as a time when earnings are low, rates of interest are high and credit is generally unavailable, characteristics that appear to closely fit U.K. experience in the post-I974 period.

The ability of any bank to meet its deposit or debt commitments has usually been measured by the size or adequacy of certain balance-sheet variables. Two variables are of particular importance in evaluating sound-

1 I t h a s been t r a d i t i o n a l in m u c h of the f inanc ia l a s se t p r i c i n g l i t e r a t u r e to r e g a r d the r i sk- f ree r a t e as be ing m e a s u r e d b y the r a t e on s h o r t - t e r m g o v e r n m e n t secur i t i es o r T r e a s u r y bills.

2 See J o h n s o n [ I967] for a full d i scuss ion of t h i s c o n c e p t .

Risk P e r c e p t i o n s a n d B a n k F a i l u r e 547

ness: a bank's capital or net worth position and the liquidity of its assets 1. In general, the larger a bank's capital relative to its deposits, the greater the protection offered depositors and other general creditors from the risks of losses on the bank's asset portfolio. Similarly, the more liquid a bank's assets, the more able it is to meet such occurrences as unexpected deposit withdrawals, unexpected changes in loan demand, short-falls in cash flow (when a borrower cannot repay on the due date), and losses due to default S . Consequently, it can be hypothesized tha t the lower are bank capital-deposit ratios, and the less liquid their assets (the higher the ratio of loans to assets), the larger the risk premiums that money- market investors will demand in order to hold large deposits.

The second factor which tradit ionally has been suggested to explain relative yields on securities has been marketability. In thick asset markets, where there are large numbers of buyers and sellers, any single buyer or seller will be a price-taker at a given moment of time. In a world where all markets are thick and assets are fully marketable, marketabi l i ty will have no effect on risk premiums [see Fisher, 1959; Johnson, 1967]. However, if asset markets are thin, then the nature of the market in which the asset is traded will tend to have an independent effect on risk premiums. Specifically, the thinner the market the more volatile an asset's price when any trade takes place, and the greater the price uncertainty facing the investor. Therefore we might expect tha t the larger the volume of money-market deposits, the lower the risk premiums demanded by investors to hold such assets.

The final factor introduced to explain the risk premia on U.K. money- market deposits in the post-crisis period was the size of the Bank of England lifeboat operation. Ideally, this should be measured by the size of the potential reservoir of funds tha t were available to meet secondary bank failures. Unfortunately, neither the Bank of England nor the Clearing banks have disclosed the upper ceiling they placed (if any) on their co-operative bail-out operation [Bank of England, I978 ]. What is publicly available, however, is the actual size of the lifeboat operation itself, i.e., the amount of funds actually loaned to the failing banks. If depositors took the quant i ty of lifeboat loans outstanding as a signal or measure of the intent of the authorities and the Clearing banks to prevent failures (the confidence effect), then the higher the quant i ty of these loans, the more favorable the signal and the lower the risk premiums. Neverthe- less, it might be argued that the quant i ty of loans provided by the Clearers

1 A l t h o u g h the B a n k of E n g l a n d [x975] a r e n o n c o m m i t t a l o n s u g g e s t i n g a n y s ingle i n d e x to m e a s u r e l i qu id i ty .

F o r a full d i scuss ion o n the d i f ferent r i sks of b a n k i n g see V o j t a [ I973] .

3 6*

548 A n t h o n y S a u n d e r s

could have been regarded by depositors as a signal of the size of the crisis; under such circumstances the larger the bail-out operation, the more the Clearers' own safety was threatened and the higher the risk premiums that would have been demanded. Hence it becomes an empirical question as to whether the lifeboat operation actually worked, i.e., restored the confidence of money-market depositors, or whether it actually signalled increased system-wide risk and therefore higher risk premiums.

Thus, we have specified a reduced-form model with four factors: bank capital-deposit ratios (K), illiquidity of assets (IL), the lifeboat fund (LB), and market volume (M), hypothesized as affecting depositors' risk pre- miums (rM-rTB) in the money market in the post-failure period (i.e., post-I974). This model is specified in equation (I) below 1, with the signs expected for each of the four independent variables:

rM- rTs = f(K, IL, M, LB) (I) - § - ?

Where r M ----- the rate on money-market deposits, assumed to be equal to either the rate of interest on 3-month sterling C.D.'s or inter-bank deposits,

rTB : the rate on 3-month U.K. Treasury bills (the risk-free rate),

K = aggregate capital-deposit rat io for U.K. banks,

IL ----- aggregate loan (advances)-asset rat io for U.K. banks 2,

M = volume of C.D.'s or inter-bank deposits outstanding s,

LB ---- lifeboat loans outstanding 4.

I V . T h e E m p i r i c a l R e s u l t s

The results for regressions of absolute differentials of C.D. and Treasury bill rates, and inter-bank and Treasury bill rates, on the independent variables specified in Section I I I are presented in equations (2) and (3)

a We follow convention here by using the absolute yield spread rather than the relative yield spread used by some authors [e. g. Benson, Rogowski, I978]. Both measures have their biases, the absolute yield spread is independent of the level of interest rates, while the relative yield spread is inversely related to the level.

2 Advances are essentially similar to business loans in the U.S.

a I t might be worth noting that volume traded has been the surrogate most often used to measure an asset's marketability [see Fisher, x959; Johnson, I967; Silvers, x973].

' Quarterly data on rM, riB, K, IL and M for the period I974(I) to x978(I) were calculated from the Statistical Abstracts in various issues of the Bank o! E n g ~ l Quarterly Bulletin and for LB, the lifeboat fund, from Bank of England [I978, p. 237, Appendix I].

Risk Perceptions and Bank Failure 549

below, where t-ratios are in parentheses and an asterisk indicates signifi- cance at the 5 percent level:

rCD-- rTB = 14.865 -- 47.902K * + 2.969IL (1.629) (- 2.757) (.126)

- .oo7M* - .oo26LB* (- 2.03) (- 4.355)

R ~ = .786 D.W. = 2.203

(2)

r m - rTB = 1.903 -- 34.o79K* + 29.2961L (.192) (- 3.040) (I.IIO)

- .0o3 M* - .oo28LB* (3) (- 2.258) (- 4.143)

R2 = .799 D.W. ----- 1.971

The results provide strong support for the Bank of England's view tha t the lifeboat had a strong confidence-restoring effect. In particular, there appears to have been an extremely strong negative relationship between the lifeboat variable and the risk premiums required on money-market deposits. Indeed, the coefficients for the lifeboat variable suggest t ha t for each ~ IOO million increase in the lifeboat fund, the required risk premiums on C.D.'s and inter-bank deposits were reduced by one quarter of one percent. Moreover, it might also be noted tha t K and M had the hypothe- sized signs and were statistically significant at the 5 percent level.

To see if the favorable confidence effect was due to the model being specified and estimated in level form, the equations were re-estimated in first difference (equations (4) and (5)) and common log form x (equations (6) and (7)).

A(rcD--rTB) = -- .160- I3.98AK + 27.299AIL (-.947) (-.699) (.855)

- .ooe AM - .0029 ALB* (- .481) (- 2.71o)

R2 = .453 D.W. = 1.943

(4)

1 Common log is the form employed by Fisher [x959] in his pioneering s tudy of risk premiums on securities.

550 A n t h o n y S a u n d e r s

A ( r I B - - r T B ) = -- .o61 - 27.o23AK + 29.IIoAIL (-.276) (-.999) (.877)

- .oo4AM - .0025 ALB* (-.738) (-2.246)

R 2 = .398 D.W. = 1.777

(5)

1og(rcD--rTB) = 25.O66 -- 11.O65 logK + 29.o18 loglL (1.865) (-I "455) (.971 )

- 4.659 logM - 2.611 logLB* (6) (- 1.441) (-2.207)

R ~ = .387 D.W. ~ 2.131

log(riB-rTB) = 18.841 - 3.6Ol logK + 26.185 loglL (I.OOI) (-.771) (.863)

- 1.475 logM - 2-547 log LB* (7) (-.485) (-2.396)

R 9 = .389 D.W. = 2.118

Looking at the differenced form first, all the coefficients have the expected signs; however, only the lifeboat variable is statistically sig- nificant at the 5 percent level. Moreover, the coefficients of the lifeboat variable suggest an effect on yield spreads of a similar order of magnitude to that found in the level regressions 1. Turning to the log form, where the coefficients provide estimates of the elasticity of risk premiums with respect to the independent variables, it can be seen tha t once again the coefficient on the lifeboat variable has a negative sign and is statistically significant at the 5 percent level. In addition, the (absolute) value of the lifeboat coefficient, and hence its elasticity, is greater than one.

Thus, the effect of the lifeboat fund on depositors' risk premiums appears to be extremely robust to assumptions about equation form. In all three equation specifications, level, first difference, and log, a powerful and statistically significant negative effect was found for the effect of the lifeboat fund on the risk premiums demanded by money- market depositors in the time period immediately following the banking crisis.

i I n t h a t a pos i t ive change of s mi l l ion in the l i feboat fund would lead to a n e g a t i v e change in the r i sk p r e m i u m s d e m a n d e d of 1/, percent .

Risk Perceptions and Bank Failure 55 r

V. Conclusions

This paper sought to determine the effect of the joint Bank of England- Clearing bank lifeboat operation.on the confidence of depositors in the U.K. money market. I t was argued that confidence could be measured by the size of the risk premiums demanded by investors to hold bank deposits rather than risk-free assets (Treasury bills). A model was specified in which depositors' risk premiums were functionally related to measures of bank capital adequacy, asset illiquidity, asset marketabi l i ty and the size of the lifeboat fund. Regression tests confirmed a significant negative relationship running from the lifeboat variable to the risk premiums de- manded on sterling C.D.'s and inter-bank deposits.

Some interesting public policy implications emerge from these con- clusions. Firstly, it appears tha t the Bank of England was correct in arguing that their support operations restored depositors' confidence in the banking system, at least as far as the confidence of large depositors was concerned. Secondly, it appears tha t since this co-operation worked so well it could provide a format for action in relatively concentrated banking systems. Indeed, as noted in the introduction, a risk-sharing approach to future banking crises appears to have been formalized by recent U.K. bank legislation, namely, the Banking and Credit Union Bills of I978. Thirdly, the deposit insurance plan, introduced in the same piece of legislation (whereby three-quarters of the first s IO,OOO of deposits are insured) virtually guarantees tha t in the event of any future banking crisis, large depositors will come to rely on the intervention of the Bank of Eng- land through some new lifeboat operation tb protect their deposits. Hence the Bank of England still retains the residual ability to enforce market discipline on large depositors and the banking system b y choosing which banks to support (and by how much) with co-operative loans.

References

Altman, Edward I., and Arnold W. Sametz (Eds.), Financial Crises: Institutions and Markets in a Fragile Environment. New York 1977.

Bank of England, "Competition and Credit Control: The Discount Market". Bank o/England Quarterly Bulletin, Vol. i i, 1971, pp. 314--315.

--, "The Capital and Liquidity Adequacy of Banks". Bank o/ England Quarterly Bulletin, Vol. 15, 1975, Pp. 240--243.

--, "The Secondary Banking Crisis and the Bank of England's Support Operations". Bank o/England Quarterly Bulletin, Vol. 18, 1978, pp. 230--239.

552 A n t h o n y Saunde r s

Benson, Earl D., and Robert J . Rogowski, "The Cyclical Behavior of Risk Spreads on New Municipal Issues". Journal o/Money, Credit and Banking, Vol. IO, 1978, pp. 348--362.

Fisher, Lawrence, "Determinants of Risk Premiums on Corporate Bonds" . The Journal o/ Political Economy, Vol. 67, 1959, pp. 217--237.

Harold, Gilbert, Bond Ratings as an Investment Guide. New York i938.

I-Iindle, Tim, "Britain's Banking Bill: Umbrella or Safety Net ?". The Banker. Vol. 128, 1978 , pp. 23--27 .

Johnson, Ramon E., "Term Structures of Corporate Bond Yields as a Function of Risk of Default". The Journal of Finance, Vol. 22, 1967, pp. 313--345.

Macanley, Frederick R., Some Theoretical Problems Suggested by the Movements o] Interest Rates, Bond Yields and Stock Prices in the United States Since 1856. New York 1938 .

Saunders, Anthony, and Charles Ward, "Regulation, Risk and Performance of U.K. Clearing Banks 1965--75". The Journal o] Industrial Economics, Vol. I5, 1975, pp. 143--159.

Silvers, J . B., "An Alternative to the Yield Spread as a Measure of Risk' '. The Journal o] Finance, Vol. 28, 1973, PP. 933--955-

Sinkey, Joseph F., Jr., "Ident i fying 'Problem' Banks: How do the Banking Authori- ties Measure a Bank's Risk Exposure ?". Journal o.t Money, Credit and Banking, Vol. IO, 1978, pp. 184--193.

Vojta, George J., Bank capital Adequacy. New York 1973.

Z u s a m m e n f a s s u n g : Das Risikoempfinden der Einleger und Bankzusammen- brliche im System einer gemeinsamen Kreditst i i tzung. - - In diesem Aufsatz wird versucht zu bestimmen, welche Wirkung die gemeinsame Rettungsaktion der Bank yon England und der Clearing Banken auf das Vertrauen der Einleger in den britischen Geldmarkt gehabt hat. Das Vertrauen wird durch die H6he der Risiko- pr[imien gemessen, welche die rnvestoren verlangen, wenn sic Bankeinlagen anstellc yon risikofreien Anlagen (Schatzwechseln) halten. Ein Modell wird spezifiziert, in dem die Risikopr~mien der Investoren mit solchen Gr60en in eine funktionale Be- ziehung gebracht werden, die die Angemessenheit des Eigenkapitals, die Illiquiditiit und Mobilisierbarkeit der Anlagen sowie die Gr613e des , ,Rettungsfonds" wiedcrge- ben. Regressionsanalysen best~tigen, da0 es eine signifikante negative Beziehung gibt zwischen den bei der Rettungsaktion gewithrten Kredi ten und den Risikoprii- mien, die ftir verbriefte Termineinlagen und Interbankeinlagen verlangt werden. Inl Ergebnis scheint die Bank yon England recht zu haben, wenn sic behauptet , ihre Unterstfltzungsaktionen hiitten das Vertrauen der Einleger in das Bankensystem wiederhergestellt, jedenfalls was die groI3en Einlegcr betrifft. Infolgedessen kann die- ses System der Zusammenarbeit als Muster ftir L~nder dienen, in dcnen die Konzen- tration des Bankensystems relativ hoch ist.

Risk Perceptions and Bank Failure 553

R 6 s u m 6 : Les pe rcep t ions de r i sque des d d p o s a n t s e t la fai l l i tc des b a n q u e s d a n s un sys t~me de sou t i en coop6rat i f des pr~ts . - - Cet ar t ic le essaie de d 4 t e r m i n e r l 'e f fe t de l 'op6ra t ion con jo in te de , c a n o t de sauve tage~ de la B a n k of E n g l a n d e t des b a n q u e s de c lear ing su r la conf iance d e s d 6 p o s a n t s au m a r c h 6 m o n 6 t a i r e du R .U . La conf iance cs t mesur6e p a r les p r i mes de r i sques d e m a n d 6 e s p a r les i nves t i s s eu r s p o u r t en i r des d~p6ts banca i r e s au lieu des act i fs s ans r i sque (bons du Tr6sor). L ' a u t e u r sp6cifie un module d a n s lequel les p r imes de r i sque des d 6 p o s a n t s s o n t f o n c t i o n e l l e m e n t r appor t6es a u x m e s u r e s de la suff isance de cap i t a l banca i re , de l ' i l l iqu id i t6 e t de la faci l i t6 d ' $cou l emen t des act i fs e t de la d i m e n s i o n du fonds de *canot de sauve tage* . Les t e s t s de r6gression con f i rmen t une re la t ion s i g n i f i c a t i v e m e n t n6ga t ive en t r e la va r i ab l e de ~canot de sauvetage** e t les p r imes de r i sque d e m a n d 6 e s p o u r les d6p6 t s A t e r m e (C. D.) e t les d6p6ts in te r -banca i res . I1 a p p a r a i t c o m m e r6su l t a t que la B a n k of E n g l a n d a r a i son en a r g u a n t q u e teurs op6ra t ions de s u p p o r t r 6 t ab l i s s a i en t la con- fiance des d~posan t s d a n s le sys t~me banca i re , au m o i n s la conf iance des d 6 p o s a n t s impor t an t s . Alors, ce t te co-op6rat ion p e u t se rv i r c o m m e f o r m a t p o u r des a c t i o n s d a n s des sy s t~me s banca i r e s r e l a t i v e m e n t concent r6s .

R e s u m e n : Percepci6n de r iesgos de los d e p o s i t a n t e s y qu i eb ra b a n c a r i a en un s i s t ema con apoyo credit icio coopera t ivo . - - E s t e a r t fcu lo p res iguc d e t e r m i n a r el efecto de la operac i6n s a l v a v i d a s de la asociac i6n B a n k of E n g l a n d - C l e a r i n g B a n k sobre la conf ianza dc los depos i t an t e s en el m e r c a d o m o n e t a r i o de l Re ino Un ido . L a confianza se m ide por la e n v c r g a d u r a de las p r i m a s de r iesgo d e m a n d a d a s po t los inve r s ion i s t a s p a r a m a n t e n e r dep6s i tos banca r ios en vez de ac t ivos l ibres de r iesgo (pagar6s de la Tesoreria) . Se especifica u n mode l o en el que las p r i m a s de r iesgo de los depos i t an t e s se re lac ionan f u n c i o u a l m e n t e con m e d i d a s de suf ic iencia de cap i t a l bancar io , i l iquidez de ac t ivos , negoc iab i l idad de ac t i vos y el t amaf io del rondo sal- vav idas . P r u e b a s de regres i6n con f i rman u n a relaci6n n c g a t i v a s igni f icante quc va desde la va r i ab le s a l v a v i d a s bac ia la p r i m a de r iesgo d e m a n d a d a sobre C. D. s t e r l ing y dep6s i tos in te rbancar ios . Aparece como re su l t ado , que el B a n k of E n g l a n d estA en 1o cierto al a rgu i r q u e sus operac iones de a p o y o r e s t a u r a r o n la conf ianza de los depos i t an t e s en el s i s t e m a bancar io , po r lo m e n o s en 1o que r e spec t a a la con f i anza de los g r andes depos i t an tes . De este m o d o es ta cooperac i6n p u e d e p ropo rc iona r u n fo rma to de acc i6n en s i s t emas banca r io s r e l a t i v a m e n t e concen t rados .