Cover IMF Working Papers
Deposit Insurance and Crisis Management
Author: Ms. G. G. Garcia
Series:
IMF Working Papers
Volume/Issue:
Volume 2000: Issue 057
Language:
English
Publication Date:
01 Mar 2000
DOI:
https://0-doi-org.library.svsu.edu/10.5089/9781451847765.001
ISBN:
9781451847765
ISSN:
1018-5941
Pages:
80
Keywords:
WP; banking system; insurance fund; financial system; failed bank; Deposit insurance; comprehensive guarantee; adverse selection; financial backing; problem bank; flight to quality; bank loss; franchise value; unguaranteed credit rating; full guarantee; subordinated debt-holder; banking industry; Commercial banks; Bank deposits; Bank resolution; Moral hazard; Global
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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A well-designed deposit insurance system (DIS) will provide incentives for citizens to keep the financial system sound. However, a poorly designed DIS can foster a financial crisis. This paper, therefore, makes recommendations for creating and running a limited, incentive-compatible, DIS. The paper also examines factors in the decision to grant, temporarily, a comprehensive guarantee, and the design of that guarantee, should a systemic financial crisis nevertheless occur. It concludes with guidance on the removal of that guarantee.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund