Deposit insurance, as the basis for ensuring financial sustainability of the banking system

Vladimer Glonti and Irina Vashakmadze

Journal of Applied Finance & Banking, 2018, vol. 8, issue 5, 3

Abstract: The main issue of economic development and implementation of market principles is the basis of ensuring financial sustainability of the banking system-stablishment of deposit insurance system. The banking system does not have model of financial sustainability of deposit insurance and accordingly no experinece, as for implementation of insurance models of operating deposits of developed market economy in Georgia, their practical implementation without preparing preliminary conditions and without taking into account the state interests will be detrimental for safety of financial-economic condition of country. Different models of deposit insurance have one goal-to take into account bank interests and rights of their clients. The means of achieving the goal are quite different from each other, In some countries, insuranceofdeposits are compulsory, in some cases voluntarily. Deposit insurance is also made by state organizations, in some non-governmental sectors, as well as tariffs.The main objective of discussions in deposit insurance is the incentives that should be included in the contribution system. These incentives refer to all interested individuals with small and large depositors.Every stakeholder in the deposit protection system must see its benefits,it is also important that in the first years of operation of the Deposit Insurance System, the bank's membership process in this system. Â JEL classification numbers: G2, G21, G22

Keywords: deposit insurance; commercial banks; financial sustainability. (search for similar items in EconPapers)
Date: 2018
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