What deposit insurance can and cannot do.: An article from: Finance & Development

This digital document is an article from Finance & Development, published by International Monetary Fund on March 1, 1999. The length of the article is 3058 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the supplier: A number of countries have tried to create a deposit insurance system to prevent wholesale deposit withdrawals that could trigger the collapse of healthy banks and to bring stability to a troubled banking system. However, this system will surely fail if it does not have both sufficient financing and a strong program of bank supervision. The best approach to funding a deposit insurance system is through premiums paid by member banks. This approach is better than depending exclusively on a government guarantee because it allows the agency responsible for the deposit insurance system to manage it responsibly and to make sure that it has the working capital required to resolve bank failures immediately. In addition, member banks will be encouraged to careful monitor the system's operations. The conditions and mechanisms necessary for a sound deposit insurance system are discussed.

Citation Details
Title: What deposit insurance can and cannot do.
Author: Ricki Tigert Helfer
Publication:Finance & Development (Magazine/Journal)
Date: March 1, 1999
Publisher: International Monetary Fund
Volume: 36 Issue: 1 Page: 22(4)

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