scholarly journals Real Deposit Insurance Coverage: An International Study

2011 ◽  
Vol 25 (3) ◽  
Author(s):  
Marieta Velikova ◽  
Kevin Rogers
Keyword(s):  
Deposit Insurance ◽  
Banking Sector ◽  
Insurance Coverage ◽  
International Study ◽  
Political Rights ◽  
Political Factors ◽  
Insurance System ◽  
Deposit Insurance System ◽  
Political Economic ◽  
The Impact

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">Recently several countries have implemented explicit deposit insurance systems. In most countries the adoption of an explicit deposit insurance system followed a banking crisis. This paper examines the impact of demographic, social, and political factors on the presence of an explicit deposit insurance system in a country. Moreover, for a subset of countries with explicit deposit insurance system we try to identify demographic, political, economic, and financial factors that affect the level of deposit insurance coverage. The findings suggest that life expectancy and political rights are related to whether an explicit deposit insurance system is in place or not. For countries with explicit deposit insurance systems the level of income, the importance of the banking sector within the financial system, and the development of domestic banking sector have a significant impact on the level of deposit insurance coverage level. The level of income, deposit money bank assets to GDP ratio, bank overhead costs to total assets ratio, presence of co-insurance, and type of administration are statistically significant in explaining differences in the level of coverage among countries. </span></span></p>

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 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>

scholarly journals SISTEM PENJAMINAN SIMPANAN (DEPOSIT INSURANCE SYSTEM) PADA INDUSTRI PERBANKAN INDONESIA

2019 ◽  
Vol 1 (2) ◽  
pp. 77-90
Author(s):  
Sjafruddin Sjafruddin
Keyword(s):  
Deposit Insurance ◽  
Insurance Premium ◽  
Bank Risk ◽  
Contagion Effect ◽  
Insurance System ◽  
Guarantee System ◽  
Deposit Insurance System ◽  
The Government ◽  
Public Costs ◽  
The Impact

Banking plays a very important role in the economy along with its function to channel funds from parties who have excess funds (surplus of funds) to those who need funds (lack of funds). If the banking industry does not work well, the economy will become inefficient and the expected economic growth will not be achieved. The risks that are always inherent in the financial and banking sectors, can trigger a crisis at any time and result in a collapse of the country's economy. To overcome the impact of the crisis, the government must pay quite large public costs. This article analyzes several important concepts, namely bank risk and the contagion effect, the operation of a deposit guarantee system that has been implemented in various countries after a financial crisis and how the deposit guarantee program is implemented in Indonesia. The results show that the Deposit Insurance System (DIS) can be implemented through law enforcement system, market discipline, political and economic freedom, low levels of corruption, strict regulations inbanking sector, setting an adequate deposit insurance premium based on the level of bank risk , and selective deposit guarantees. Keywords: Deposit Insurance System,Indonesia Deposit Insurance Corporation, Risk   Abstrak Perbankan memegang peran yang sangat penting dalan perekonoman seiring dengan fungsinya untuk menyalurkan dana dari pihak yang mempunyai kelebihan dana (surplus of funds) kepada pihak-pihak yang membutuhkan dana (lack of funds). Apabila industri perbankan tidak bekerja dengan baik, maka perekonomian menjadi tidak efisien dan pertumbuhan ekonomi yang diharapkan tidak akan tercapai. Risiko yang selalu melekat dalam sektor keuangan dan perbankan, dapat memicu terjadinya krisis sewaktu-waktu dan berakibat lumpuhnya ekonomi negara. Untuk menanggulangi dampak krisis tersebut, pemerintah harus mengeluarkan biaya publik cukup besar. Artikel ini menganalisis beberapa konsep penting, yaitu risiko bank dan  efek penularan (Contagion Effect),penyelenggaraan sistem penjaminan simpanan yang telah di implementasikan berbagai negara setelah terjadi krisis keuangan dan bagaimana implementasi program penjaminan simpanan di Indonesia.Hasilnya menunjukkan bahwaDeposit Insurance System (DIS) dapat diimplementasikan melalui sistem penegakan hukum yang kuat, disiplin pasar, kebebasan politik dan ekonomi, tingkat korupsi yang rendah, regulasi khususnya di bidang perbankan yang kuat, penetapan premi penjaminan simpanan yang memadai dan berdasarkan tingkat risiko bank, serta pemberian jaminan simpanan yang selektif. Kata Kunci:Deposit Insurance System, Lembaga Penjamin Simpanan, Risiko

scholarly journals Research on the Deposit Insurance Pricing Under the Marketing RMB Interest Rate

2016 ◽  
Vol 2 (2) ◽  
pp. 86
Author(s):  
Lingyan Sun ◽  
Tianning Shi ◽  
Panlu Shi
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Deposit Insurance ◽  
Insurance Pricing ◽  
Insurance System ◽  
Functional Representation ◽  
Interest Rate Marketization ◽  
Deposit Insurance System ◽  
The Interest Rate ◽  
The Impact

The deposit insurance pricing is the core issue of deposit insurance system, it determines the success or failure of the deposit insurance system in a way. In the current deposit insurance pricing methods, we treat the interest rates as a constant. With the interest rate marketization in China, the deposit insurance pricing methods have also changed accordingly. In this paper, we will give a functional representation of the impact of RMB interest rate marketization on interest rate by fitting the coefficients of the cubic function. Then we will use the data of 2013 to prove it. For the points that do not conform to this rule, we also have some explanations related to the major economic events at that time.

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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