Deposit Insurance: Obtaining the Benefits and Avoiding the Pitfalls

August 1, 1996

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper contrasts deposit protection with other forms of insurance, examines why goods and services of all kinds receive warranties and guarantees, and explores the particular characteristics of deposits and banks that merit deposit insurance. It examines a variety of reasons why countries choose to adopt systems of deposit insurance, the pitfalls that can arise from poorly designed schemes, and the features of a scheme that successfully avoids these pitfalls.

Subject: Banking, Commercial banks, Deposit insurance, Distressed institutions, Financial crises, Financial institutions, Insurance, Insurance companies

Keywords: adverse selection, Africa, bank closure law, bank competition, bank customer, bank owner, bank resource, bank supervisor, banking system, commercial bank, Commercial banks, Deposit insurance, deposit protection, deposit protection scheme, Distressed institutions, Europe, failed bank, Insurance, Insurance companies, insurance coverage, insurance fund, lending bank, protection scheme, WP

Pages:
64
Volume:
1996
DOI:
https://doi.org/10.5089/9781451850499.001
Issue:
083
Series:
Working Paper No. 1996/083
Stock No:
WPIEA0831996
ISBN:
9781451850499
ISSN:
1018-5941

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