scholarly journals Osiguranje depozita i utjecaj na financijski sustav

2018 ◽  
Vol 8 (2) ◽  
pp. 48-64
Author(s):  
Martina Maté
Keyword(s):  
Deposit Insurance ◽  
Global Financial Crisis ◽  
Financial System ◽  
System Stability ◽  
Public Confidence ◽  
Insurance System ◽  
Deposit Insurance System ◽  
The World ◽  
The Republic ◽  
Fiscal Pressure

The importance of financial system stability is best demonstrated by the recent global financial crisis. The slump in the financial markets and institutional disturbances have threatened seriously the financial systems around the world and questioned their role in mediating the exchange of capital surplus and their targeting to deficit entities. Many financial institutions have found themselves on the verge of collapse, and countries around the world have launched expansionary measures and invested huge resources in rescuing their markets. As financial and banking crises always cause fiscal pressure, the importance of upgrading the financial system through preventive measures that will preserve public confidence in its security and protect the economy from major losses is surely in the interest of governments worldwide. The goal of these measures, referred to as the financial system security grids, is to create controlled conditions for less informed market participants and protect them from loss. Deposit insurance systems have been recognized as one of the key elements of the financial system preventive security grids. The most important goal of the organized deposit insurance system is to protect the assets of so-called “small savers” or consumers unable to independently assess the risk of the institution in which they relocate their surplus funds. The aim of this paper is to explain the role of an organized deposit insurance system with special attention to the system in the Republic of Croatia.

scholarly journals Perspectives of the financial stability protection and banking risk prevention

2021 ◽  
Vol 14 (3) ◽  
pp. 109-126
Author(s):  
Miroslav Čavlin ◽  
Jelena Vapa-Tankosić ◽  
Srđan Egić
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Financial System ◽  
Risk Prevention ◽  
Financial Security ◽  
Insurance System ◽  
Deposit Insurance System ◽  
The Republic ◽  
The Stability ◽  
Security Network

The deposit insurance system is the backbone of the protective mechanism of the financial security network, which enables the prevention of a "stampede" of depositors on banks in order to prevent a negative effect on the stability of the financial system. Therefore, especially in the event of a crisis, such as the pandemic caused by COVID-19, the protection of financial stability and depositors emphasizes the importance and role of efficient organization of the deposit insurance system. The paper starts from the analysis of the concept of a financial security network in order to create a relevant basis for modeling the directions of development of the system of financial stability protection and risk prevention of banking operations. The aim of the paper is to conduct a research into the theoretical and empirical findings in order to identify the potential for a more effective deposit insurance system in the Republic of Serbia. An efficient deposit insurance system in the Republic of Serbia should provide support and protection for depositors, most of whom do not possess the necessary knowledge which can help them assess banking risks, i.e. risks of financial failure and crisis. The development of our deposit insurance system should be aimed at strengthening the stability of the financial system and banking operations, i.e. its resilience to crisis disturbances on the market.

scholarly journals Sources Of Non-Performing Loans In Turkish Banking System

2011 ◽  
Vol 5 (10) ◽  
Author(s):  
Gokhan Karabulut ◽  
Mehmet Huseyin Bilgin
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Developing Economies ◽  
Banking System ◽  
Bank Loans ◽  
System Stability ◽  
Insurance System ◽  
Turkish Government ◽  
Deposit Insurance System ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman; font-size: x-small;">The purpose of this paper is to examine the impact of the unlimited deposit insurance on non-performing loans and market discipline. Deposit insurance program play a crucial role in achieving financial stability. Governments in many advanced and developing economies established deposit insurance schemes for reducing the risk of systemic failure of banks. Deposit insurance has a beneficial effect of reducing the probability of a bank run.<span style="mso-spacerun: yes;">&nbsp; </span>However deposit insurance systems have its own set of problems. Deposit insurance systems create moral hazard incentives that encourage banks to take excessive risk. Turkey established an explicit deposit insurance system in 1960. Until 1994, the coverage determined by a flat rate but in that date, Turkey experienced a major economic crisis. In April 1994, Turkish government started to apply an unlimited deposit insurance scheme to restore banking system stability. Unlimited deposit insurance caused a remarkable increase at non-performing loans. This paper empirically estimates the impact of unlimited deposit insurance system on non-performing bank loans (NPLs) and analyses the other potential sources of NPLs. </span></p>

Formal and Informal Financial Channels in China

2013 ◽  
Vol 05 (03) ◽  
pp. 38-48
Author(s):  
Lihong WANG
Keyword(s):  
Financial Market ◽  
Significant Role ◽  
Deposit Insurance ◽  
Financial System ◽  
Legal Protection ◽  
Financial Risks ◽  
State Sector ◽  
Insurance System ◽  
Financing Channels ◽  
Deposit Insurance System

China has achieved remarkable growth despite weak legal protection of investors and an underdeveloped financial system. Other financing channels have played a significant role in the growth of the non-state sector. However, informal financial organisations do not have mechanisms that guard against financial risks and lack a reserve and deposit insurance system. Recent measures seem inadequate in accelerating the development of China's financial market. More and bolder reforms are needed.

scholarly journals TATA KELOLA SISTEM PENJAMINAN SIMPANAN PERBANKAN DI INDONESIA

2020 ◽  
Vol 2 (2) ◽  
pp. 113-125
Author(s):  
Sjafruddin Sjafruddin ◽  
Iskandar Iskandar
Keyword(s):  
Interest Rate ◽  
Moral Hazard ◽  
Risk Taking ◽  
Deposit Insurance ◽  
Banking System ◽  
Public Confidence ◽  
Insurance System ◽  
Deposit Insurance System ◽  
Governance Process ◽  
The Government

The ratification of Law Number 24 of 2004 concerning the Deposit Insurance Corporation (LPS) marks the formal process of institutionalizing the deposit insurance system in Indonesian banking. After the banking systemic crisis in 1997 that hit various countries including Indonesia, the government made various stabilization and reform policies in the financial sector to improve the banking system. The blanket guarantee policy for bank customer deposits in 1998 with no limits (blanket guarantee) restored public confidence in banks, but on the other hand this guarantee also created a moral hazard risk for banks. The existence of the LPS ended the unlimited deposit insurance system by limiting the guarantee in the form of a deposit insurance limit and a guaranteed interest rate known as the LPS interest rate. This article attempts to describe and analyze the institutionalization process and governance process in the deposit insurance system in Indonesia. The results show that the process of institutionalizing the deposit insurance system in Indonesia is carried out in stages by assessing banking risk taking and public perceptions of the banking industry in Indonesia. In the governance process, the LPS carries out its function as guarantor of deposits of depositors, LPS is tasked with determining and formulating policies for implementing deposit insurance and implementing deposit insurance. LPS makes payment of guarantee claims to depositors from banks whose business licenses have been revoked as long as they meet the requirements stipulated by the LPS Law.   Keywords: Deposit Insurance Agency, Institutionalization, Governance.     Abstrak Lahirnya Undang-Undang Nomor 24 Tahun 2004 tentang Lembaga Penjamin Simpanan (LPS) menandai proses formal institusionalisasi sistem penjaminan simpanan pada perbankan di Indonesia. Setelah Krisis sistemik perbankan tahun 1997 yang melanda berbagai negara termasuk Indonesia, pemerintah membuat berbagai kebijakan stabilisasi dan reformasi di sektor keuangan guna menyehatkan sistem perbankan. Kebiijakan penjaminan terhadap jumlah simpanan nasabah perbankan pada tahun 1998 dengan tanpa batasan (blanket guarantee) mengembalikan kepercayaan masyarakat terhadap perbankan, namun disisi lain jaminan tersebut juga menimbulkan risiko moral hazard bagi perbankan. Keberadaan LPS mengakhiri sistem penjaminan simpanan tanpa batas dengan membatasi penjaminan dalam bentuk limit penjaminan simpanan dan suku bunga yang dijamin yang dikenal dengan suku bunga LPS. Artikel ini mencoba memaparkan dan menganlisa proses institusionalisasi dan proses tata kelola (governance) pada sistem penjaminan simpanan di Indonesia. Hasilnya menunjukkan bahwa proses institusionalisasi sistem penjaminan simpanan di Indonesia dilakukan secara bertahap dengan menilai risk taking perbankan dan persepsi masyarakat terhadap industri perbankan di Indonesia. Dalam proses tata kelola, LPS menjalankan fungsinya sebagai penjamin simpanan deposan, LPS bertugas menetapkan dan merumuskan kebijakan pelaksanaan penjaminan simpanan serta melaksanakan penjaminan simpanan. LPS melakukan pembayaran klaim penjaminan kepada deposan dari bank yang dicabut izin usahanya sepanjang telah memenuhi persyaratan yang telah ditetapkan oleh UU LPS.   Kata kunci: Lembaga Penjamin Simpanan, Institusionalisasi, Tata Kelola.

scholarly journals Do Deposit Insurance Systems Promote Banking Stability?

2021 ◽  
Vol 9 (3) ◽  
pp. 52
Author(s):  
Nafis Alam ◽  
Ganesh Sivarajah ◽  
Muhammad Ishaq Bhatti
Keyword(s):  
Financial Stability ◽  
Deposit Insurance ◽  
Global Financial Crisis ◽  
Institutional Environment ◽  
Insurance Coverage ◽  
Banking System ◽  
Insurance System ◽  
Deposit Insurance System ◽  
Banking Stability ◽  
The Impact

During the global financial crisis (GFC), regulators and policymakers turned to deposit insurers, along with monetary and fiscal measures, to help restore market confidence and promote financial stability. These events have focused attention on the role of deposit insurers and their role in the banking system. Recent literature reveals that during the GFC, deposit insurance maintained banking stability and successfully prevented customers doing ‘runs’ on the banks. The objective of this paper is to examine the deposit insurance system’s coverage limits and the impact on banking stability, in the context of a jurisdiction’s economic and institutional environment. Our model examines 61 jurisdictions in Asia and Europe with explicit deposit insurance systems, covering the pre- and post-GFC period between 2004 and 2014. We also examine subsets to investigate the effects of the region by comparing Asia and Europe, as well as a subset using the date of establishment of the deposit insurance system to understand if maturity matters. The results indicate that deposit insurance systems, and specifically deposit insurance coverage levels, have both positive and negative effects on banking stability. We find significant associations with certain economic and institutional factors; however, there are differences between the models we ran. These can be ascribed to regional factors and the date of when a deposit insurance system was established.

scholarly journals Market-oriented interest rate, deposit insurance system and bank runs

2019 ◽  
Vol 2 (1) ◽  
pp. 53-72
Author(s):  
Guoqiang Tian ◽  
Yupu Zhao ◽  
Rukai Gong
Keyword(s):  
Interest Rate ◽  
Deposit Insurance ◽  
Dynamic Equilibrium ◽  
Financial System ◽  
Policy Implications ◽  
Bank Runs ◽  
Content Type ◽  
Insurance System ◽  
Bank Run ◽  
Deposit Insurance System

Purpose In the transitional process of promoting market-oriented interest rate, China is confronted with an important theoretical and practical issue: how to avoid bank runs and realize the smooth operation of the financial system. The purpose of this paper is to construct a bank-run dynamic model by taking into account a market environment with the transmission of multiple rounds of noise information, a comprehensive consideration of depositors’ expectation of return on assets (or earning rate/yields of assets), the efficiency of information processing and dissemination, and the different motives for premature withdrawal. Design/methodology/approach The authors discussed the dynamic process of bank runs, furnished the ratio and number of each round of bank run, and characterized the corresponding dynamic equilibrium as well. Furthermore, the authors expanded the benchmark model by incorporating the deposit insurance system (DIS) to discuss the action mechanism of DIS overruns. Findings The results show that DIS implementation has two opposite effects: stabilized expectation and moral hazard, by virtue of its influence over the two types of premature withdrawal motives of depositors; the implementation effect of DIS rests with the dual-effect comparison, which is endogenous to the institutional environment. Originality/value The policy implications are as follows: while implementing DIS, it is necessary to establish and improve the corresponding institutional construction and supporting measures, to consolidate market discipline and improve the supervisory role of the bank’s internal governance mechanism, so as to reduce the potential moral hazards. The financial system reform shall be furthered and the processing and dissemination efficiency of information be elevated to prompt depositors to form stable withdrawal expectations, thereby enhancing the stabilizing effect of DIS.

scholarly journals Improving the System for Ensuring the Reliability of Savings Returns in the Russian Banking Sector

2020 ◽  
pp. 24-29
Author(s):  
Yelena Vladimirovna Travkina
Keyword(s):  
Trust Management ◽  
Deposit Insurance ◽  
Banking Sector ◽  
Insurance Fund ◽  
Insurance System ◽  
Deposit Insurance System ◽  
The World ◽  
Modern System ◽  
Banking Institution ◽  
Extension Of State

One of the most multifaceted and multidimensional socially significant categories in the development of the Russian savings system is its stability and relia-bility. In this regard, the study of ways to improve the system of guarantees of reliability of savings in the banking sector as one of the segments of the Russian savings system is an important tool in de-termining the directions of its further effective de-velopment. The paper assesses the main levels of implementation of the modern system of guarantees of the reliability of savings return in the banking sector, analyzes the world experience of building Deposit insurance systems, reveals the transfor-mation of insurance compensation in the historical perspective and methods of deducting contribu-tions to the Deposit insurance Fund. The directions of improving the efficiency of the Deposit insurance system are highlighted, namely: the use of strict measures to detect criminal mechanisms in Deposit insurance, strengthening control by bank superviso-ry authorities and banks’ creditors, improving finan-cial literacy of the population, expanding the boundaries of the Deposit insurance system in the extension of state guarantees to entities and funds trust management. The author’s mechanism for im-plementing guarantees of reliability of savings re-turns in the subsystem of banking institution is proposed.

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