According to Buser, Chen, and Kane's Theoretical Model for Banks

According to Buser, Chen, and Kane's theoretical model for banks' capital structure with and without deposit insurance, banks would have lower optimal debt to asset ratios, (i.e. higher equity to asset ratios) since uninsured depositors and other debt holders would demand a risk premium for banks having higher financial leverage, with regulators offsetting incentives for higher financial leverage with deposit insurance by having regulatory minimum capital ratios.