Deposit Insurance and Crisis Management

Garcia, Gillian

Abstract

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Deposit Insurance and Crisis Management

Gillian Garcia

GGH Garcia Associates

March 2000

IMF Working Paper No. 00/57

Abstract:
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.

Number of Pages in PDF File: 81

Keywords: Deposit insurance, comprehensive guarantee

JEL Classification: G18, G21, G22, G28, G30

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Date posted: February 9, 2006

Suggested Citation

Garcia, Gillian Glenys, Deposit Insurance and Crisis Management (March 2000). IMF Working Paper, Vol. , pp. 1-81, 2000. Available at SSRN: http://ssrn.com/abstract=879531

Contact Information

Gillian Glenys Garcia (Contact Author)

GGH Garcia Associates ( email )

2407 Highland Green Court
Alexandria, VA 22312
United States
1-703-354-6065 (Fax)