Deposit Insurance Design and Implementation: Policy Lessons from Research and Practice

Abstract

This paper illustrates the trends in deposit insurance adoption. It discusses the cross-country differences in design, and synthesizes the policy messages from cross-country empirical work as well as individual country experiences. The paper develops practical lessons from this work and distills the evidence into a set of principles of good design. Cross-country empirical research and individual-country experience confirm that, for at least the time being, officials in many countries would do well to delay the installation of a deposit insurance system.

Keywords: Banks & Banking Reform, Financial Intermediation, Financial Crisis Management & Restructuring, Insurance & Risk Mitigation, Non Bank Financial Institutions