The Design and Implementation of Deposit Insurance Systems

Arguing against the development of ""best practices"" applicable to all systems, this paper stresses on the importance of incorporating each country's individual characteristics, and objectives in adopting a deposit insurance system to ensure an effective system that minimizes disincentives and distortions to financial sector intermediation.

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This paper describes recently established deposit insurance systems, identifying emerging trends. In line with previous IMF work on the subject, it argues against the development of ""best practices"" applicable to all systems, but rather, stresses the importance of incorporating each country's individual objectives in adopting a deposit insurance system, as well as that country's characteristics, to ensure an effective system that minimizes disincentives and distortions to financial sector intermediation. It also includes a summary of the academic literature.