The EU Deposit Insurance Directive: Does One Size Fit All?

Harry Huizinga

No 5277, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The EU deposit insurance directive requires member states to maintain deposit insurance with a minimum insured amount of 20,000 euros. This paper reviews the rationale for international coordination of deposit insurance policies. For international externalities of deposit insurance policies to exist, there has to be international ownership of either bank deposits or bank shares. On both counts, EU banking markets are currently highly integrated. The minimum coverage of 20,000 euros imposes costs if it forces some countries to 'overinsure' deposits. From a national perspective, the deposit insurance directive does not appear to result in overinsurance in the EU-15, but there may be overinsurance in several of the new member states.

Keywords: Deposit insurance; International coordination (search for similar items in EconPapers)
JEL-codes: F36 G28 (search for similar items in EconPapers)
Date: 2005-10
New Economics Papers: this item is included in nep-eec, nep-fin, nep-fmk and nep-ias
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Citations: View citations in EconPapers (3)

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