The case for private administration of deposit guarantee schemes

Bruno Meyerhof Salama () and Vicente P. Braga ()
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Bruno Meyerhof Salama: Bruno Meyerhof Salama
Vicente P. Braga: Focaccia Amaral Law Firm in São Paulo

Journal of Banking Regulation, 2023, vol. 24, issue 1, No 4, 65 pages

Abstract: 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 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 insurance; Deposit guarantee scheme; Financial regulation; Management (search for similar items in EconPapers)
JEL-codes: K20 K22 K23 K33 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1057/s41261-021-00188-8

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