Deposit Insurance and Crisis Management

Download or read book Deposit Insurance and Crisis Management written by G. G. Garcia and published by International Monetary Fund. This book was released on 2000-03 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.