Deposit insurance in theory and practice

Dale, Richard (2000) Deposit insurance in theory and practice. Journal of Financial Regulation and Compliance, 8, (1), 36-56. (doi:10.1108/eb025029).


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Having been hailed as the most important contribution to stabilising the US financial system after the 1929—33 crash, deposit insurance is now being blamed for financial destabilisation, particularly in emerging markets. This paper focuses on the relationship between deposit insurance and systemic stability in the banking system, drawing on recent experience in the USA, Europe and Japan. The conclusion is that if there is an embedded perception that in the last resort depositors will be protected beyond insurance limits then market-orientated solution to the problems of ‘moral hazard’ and excessive risk taking cannot work.

Item Type: Article
Digital Object Identifier (DOI): doi:10.1108/eb025029
ISSNs: 1358-1988 (print)
Related URLs:
Subjects: H Social Sciences > HG Finance
Divisions : University Structure - Pre August 2011 > School of Management
ePrint ID: 64677
Accepted Date and Publication Date:
Date Deposited: 21 Jan 2009
Last Modified: 31 Mar 2016 12:49

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