Modis: A Market-Oriented Deposit Insurance Scheme
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper argues that an optimal deposit insurance scheme would allow the level of insurance coverage to be determined by the market. Based on this principle, the paper proposes an insurance scheme that minimizes distortions and embodies fairness and credibility, two essential characteristics of a viable and effective deposit insurance scheme. Using a simple model for the determination of the optimal level of insurance coverage, it is shown that the optimal coverage is higher for developing compared to developed countries; a condition that is broadly satisfied by prevailing deposit insurance practices around the world.
Series:
Working Paper No. 2002/207
Subject:
Bank deposits Banking Deposit insurance Distressed institutions Financial crises Financial institutions Financial sector policy and analysis Financial services Insurance Moral hazard
English
Publication Date:
December 1, 2002
ISBN/ISSN:
9781451874662/1018-5941
Stock No:
WPIEA2072002
Pages:
33
Please address any questions about this title to publications@imf.org