Deposit Insurance Systems - Lessons from the Crisis for CESEE Banking Systems

Abstract

The deposit insurance (guarantee) industry used to attract much attention during financial crises. In the economic literature it was a moral hazard to prevail in the research. On the political agenda the level of guarantees has been in focus for a long time. The recent financial crisis proved that another important issue which requires in-depth research and strategic decisions is a payout capability (financial potential) of the deposit insurance industry. In the article the author tries to analyse the moral hazard and payout capability issues in the context of the recent crisis as well as to point out the most important lessons for CESEE countries.

Keywords: deposit insurance (guarantee), coverage, moral hazard, payout capability

JEL Classification: G2, F3