Introductory Brief (Part 1): Challenges for Deposit Insurers

Rachel Youssef (), Rose Kushmeider () and Diane Ellis ()
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Rachel Youssef: Federal Deposit Insurance Corporation
Rose Kushmeider: Federal Deposit Insurance Corporation
Diane Ellis: Federal Deposit Insurance Corporation

No 1, IADI Fintech Briefs from International Association of Deposit Insurers

Abstract: Fintech is disrupting the traditional business model of deposit-taking institutions (DTIs), around which DIS have been designed and implemented. These new business models blur the lines between financial products and services offered within and outside the traditional financial system and have the potential to introduce confusion as to whether a product is guaranteed by the DIS. For example, in some jurisdictions, fintech firms directly compete with DTIs to provide lending and payment services, but are not covered by the deposit insurance system. In other jurisdictions, fintechs may offer their products and services in partnership with DTIs and as such may be covered by the DIS. Such innovation presents a challenge for deposit insurers around the issue of public awareness of deposit insurance coverage and ultimately brings into question the DIS’ role in supporting financial stability.

Keywords: deposit insurance; bank resolution (search for similar items in EconPapers)
JEL-codes: G21 G33 (search for similar items in EconPapers)
Date: 2021-09
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