Article
The Case for Private Administration of Deposit Guarantee Schemes
Journal of Banking Regulation
(2021)
Abstract
We make the case that the responsibility for appointing board members in Deposit Guarantee Schemes (DGS) for commercial banks should be entrusted to the industry. In doing so, we challenge the position adopted by the International Monetary Fund, which has proposed public DGSs as the best practice. We use information gathered from a novel survey and other evidence to lay out the comparative advantages of private over public DGS administration, and contend that the role of the government should in principle be limited to regulating DGSs specifically and financial markets in general. We conclude that the current worldwide trend towards greater involvement of government in financial regulation should not be extended to the administration of DGSs.
Keywords
- deposit guarantee,
- deposit insurance,
- financial regulation
Disciplines
Publication Date
December 30, 2021
Citation Information
Bruno Meyerhof Salama and Vicente Braga. "The Case for Private Administration of Deposit Guarantee Schemes" Journal of Banking Regulation (2021) Available at: http://works.bepress.com/bruno_meyerhof_salama/150/