The article explores how deposit insurance and bank ownership influence how much risk banks take. The level of market discipline on banks' risk-taking is affected by the type of deposit insurance in place, as well as the ownership structure of banks. The researchers found that the relationship between deposit insurance coverage and risk-taking follows a U-shaped pattern, influenced by factors like government ownership and shareholder rights. The optimal deposit insurance coverage that minimizes risk depends on the specific characteristics of each country's banking system. In emerging markets in Eastern Europe and Asia, the actual deposit insurance coverage may not align with what is best for minimizing risk.