agency in paying depositors the full value of their claims is varied to solve for the optimal depositor access delay time.
The remainder of the paper is organized as follows: Section 2 identifies and analyzes the sources of potential losses to depositors in bank failures. Section 3 discusses the implications of delayed depositor access to their funds at insolvent banks in terms of the effects on depositor discipline on the one hand and depositorpressure to protect all deposits on the other. Ways that policymakers can reduce depositor losses from bank failures
Losses may accrue to depositors at insolvent banks both at and after the time of official resolution. Losses at resolution occur because of poor closure rules and regulatory forbearance. Losses after resolution occur if depositors' access to their claims is delayed or "frozen." While the sources and implications of losses at resolution have been analyzed previously, the sources and implications of losses after resolution have received little attention. This paper examines the causes of delayed depositors' access to their funds at resolved banks, describes how the FDIC provides immediate access, reports on a special survey of access practices in other countries, and analyzes the costs and benefits of delayed access in terms of both the effects on market discipline and depositor pressure to protect all deposits.