Occasional Papers

The Design and Implementation of Deposit Insurance Systems

Author/Editor:

David S. Hoelscher ; Michael W Taylor ; Ulrich H Klueh

Publication Date:

December 7, 2006

Electronic Access:

Link to Abstract

Summary:

This paper describes recently established deposit insurance systems, identifying emerging trends. In line with previous IMF work on the subject, it argues against the development of "best practices" applicable to all systems. Rather, it stresses the importance of incorporating each country’s individual objectives in adopting a deposit insurance system, as well as that country’s characteristics, to ensure an effective system that minimizes disincentives and distortions to financial sector intermediation. The paper includes a summary of the academic literature.

Series:

Occasional Paper No. 2006/006

Subject:

Bank deposits Banking Commercial banks Cooperative banks Deposit insurance Distressed institutions Financial crises Financial institutions Financial sector policy and analysis Financial services Moral hazard