Deposit Insurance around the World
In the past two decades, in a series of banking crises around the world, banks have become systematically insolvent. These crises have occurred in developed and developing economies alike. To make such financial system breakdowns less likely and to...
| Main Authors: | , |
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| Format: | Journal Article |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/09/17737158/deposit-insurance-around-world http://hdl.handle.net/10986/17437 |
| Summary: | In the past two decades, in a series of
banking crises around the world, banks have become
systematically insolvent. These crises have occurred in
developed and developing economies alike. To make such
financial system breakdowns less likely and to limit their
costs if they occur, policymakers feel the need for
financial safety nets. These include such policies as
implicit or explicit deposit insurance, a lender of last
resort function of the central bank, bank insolvency
resolution procedures, and bank regulation and supervision.
Of these policies, explicit deposit insurance has been
gaining popularity in recent years. Since the 1980s the
number of countries with explicit deposit insurance schemes
almost tripled, with most OECD countries and an increasing
number of developing economies adopting some form of
explicit depositor protection. In 1994 deposit insurance
became the standard for the newly created single banking
market of the European Union. Establishing an explicit
deposit insurance scheme became part of the generally
accepted best practice advice given to developing economies. |
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