| dc.description.abstract | A major point of debate in most financial systems is the relevance, form and scope of
regulatory intervention, particularly on the trade-off between the benefits and costs of
regulation. Deposit insurance is a prominent part of most modern regulatory financial
safety nets. As with banking regulation in general, it is still debatable whether deposit
insurance is necessary in all cases. While most deposit insurance schemes have the
joint aims of financial stability and depositor protection, there are inherent difficulties
posed by the introduction of such schemes, in particular the moral hazard and agency
problems. For the purpose of this thesis, these difficulties have been generally termed
as the deposit insurance problem.
A number of issues arise for consideration if deposit insurance is to be provided. The
thesis argues that the optimal design of deposit insurance schemes is dependent on
three factors: an effective system of bank supervision and regulation; identification
and prioritisation of the policy objectives which the scheme is to achieve; and
adoption of incentive-compatible systems in line with sound practice guides but
tailored to country-specific circumstances.
There is generally no fixed or absolute model for all states. The thesis involves an
assessment of deposit insurance schemes in the United Kingdom, the United States
and Nigeria. An assessment of these schemes, as well as international and regional
developments, will show that cross-country differences should play an important
factor in the adoption or reform of deposit insurance schemes, but that there arc
common concerns for policymakers whatever the distinctiveness of local
circumstances.
The challenge for policymakers is how to achieve a fair balance between the
protection of depositors and banking system stability on the one hand and minimizing
elements of the deposit insurance problem on the other hand. The aim is to
recommend a future course of reform that includes a general support model and
specific recommendations for the jurisdictions that are examined | en_US |
