The Regulation of Deposit Guarantee Schemes in Switzerland and the United States PDF Download
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Author: Samir Ainouz
Publisher:
ISBN: 9783038913832
Category :
Languages : en
Pages :
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Author: Samir Ainouz
Publisher:
ISBN: 9783038913832
Category :
Languages : en
Pages :
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Book Description
Author: Armand Zorn
Publisher: GRIN Verlag
ISBN: 3656983933
Category : Law
Languages : en
Pages : 17
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Essay from the year 2015 in the subject Law - Civil / Private, Trade, Anti Trust Law, Business Law, grade: A-, Johns Hopkins University (SAIS), course: European Financial Markets, language: English, abstract: The financial crisis has highlighted the importance of deposit protection and has brought this neglected topic to the core of the debate on financial stability (Zimmermann, 2013). Germany was hit harder than most experts and politicians expected. The federal government was forced to take unprecedented steps, including the nationalization of banks and providing an unlimited guarantee on savings deposits. These actions illustrated the necessity to reform the German deposit system, opening a controversial debate on both, the national and European level. Deposit protection schemes serve two main functions. First, they provide security to depositors and should help to prevent bank runs. Second, they should facilitate bank resolution, shielding depositors from losses. Together with financial regulation and supervision and lenders of last resort, deposit protection represents a key component of financial safety nets, which aim at reducing the occurrence of financial crises and limiting their effects if they do occur. Accordingly, deposit insurance schemes play an important role for individual market participants as well as for the entire economy. This paper examines the German deposit insurance system before, during, and after the financial crisis. It answers three main questions: First, what was the state of the deposit insurance system before the financial crisis? Second, how did the deposit schemes fared during the crisis? Third, what reforms have been introduced and what is the current state of the system?
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451957904
Category : Business & Economics
Languages : en
Pages : 28
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In the United States, the thrift industry crisis and evidence of financial weakness in the banking industry have raised concerns about the cost-effectiveness of the present framework of deposit insurance and regulation of depository institutions that serves to control systemic risks. The reform proposals discussed in this paper aim to create a more cost-effective approach by either modifying the operation of the deposit insurance funds to reduce the value of the deposit guarantee or altering those regulations of depository institutions that limit portfolio risk to reduce their overall cost. Consideration is given to both the potential effectiveness and practicability of the proposed reforms.
Author: Christos Gortsos
Publisher:
ISBN:
Category :
Languages : en
Pages : 29
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The present study undertakes a brief overview of the regulatory developments which have taken place, both at international (see below, under 2) and at EU level (under 3.3), as a response to the recent (2007-2009) international financial crisis with regard to the operation of deposit guarantee schemes (for a brief cost-benefit analysis of deposit guarantee schemes see below, under 1). It also overviews the current proposal for an EU Regulation pertaining to the establishment of a European Deposit Insurance Scheme and a European Deposit Insurance Fund (on this institutional development see below, under 3.2), as the (still missing) third main pillar of the European Banking Union, which is a child of the current fiscal crisis in the euro area (under 3.1).
Author: Reza Vaez-Zadeh
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 40
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This paper argues that an optimal deposit insurance scheme would allow the level of insurance coverage to be determined by the market. Based on this principle, the paper proposes an insurance scheme that minimizes distortions and embodies fairness and credibility, two essential characteristics of a viable and effective deposit insurance scheme. Using a simple model for the determination of the optimal level of insurance coverage, it is shown that the optimal coverage is higher for developing compared to developed countries; a condition that is broadly satisfied by prevailing deposit insurance practices around the world.
Author: Divya Padmanabhan
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
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Book Description
This paper seeks to analyse the depositor protection and deposit insurance schemes put in place by the Swiss regulators. The impact of the Euro Debt crisis and the handling of the same by the Swiss banks are also analysed.During the Great Depression, panicky Americans converted deposits into currency and thousands of banks that could not meet withdrawal demands were forced to close. When the banks closed, depositors ended up losing all of their savings. Consequently, President Franklin Roosevelt signed the Banking Act of 1933, which created the Federal Deposit Insurance Corporation (FDIC). This independent U.S. government agency protects depositors against losses and prevents runs on FDIC-insured banks or savings association banks. Discover what types of deposits the FDIC covers and how to make sure that you are getting the highest level of insurance for your money.
Author:
Publisher:
ISBN: 9789276126058
Category :
Languages : en
Pages :
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Deposit insurance protects deposits and discourages depositors from bank runs. The strength of a deposit guarantee scheme (DGS) is primarily determined by the relative strength of its member institutions (mostly banks), the level of available financial means and the guarantor. It follows the principle that banks, participating in a DGS, and not taxpayers, should pay for bank failures. In the European Union, deposit insurance has been harmonised over the past two decades. The current rules and procedures on depositor protection are set out in the Deposit Guarantee Schemes Directive (DGSD) adopted in 2014, which strengthened depositor protection by requiring faster pay-outs, more robust funding, including a minimum target level for ex ante risk-based contributions, and increased information disclosure. Deposit insurance is therefore organised at national level and guaranteed by national governments, which are required to contribute when the funds of national DGSs are insufficient. In November 2015, the Commission proposed to set up a European deposit insurance scheme (EDIS) for bank deposits in the euro area as the third pillar of the Banking Union. Negotiations on the EDIS proposal are still ongoing. The DGSD contains about 22 national options and discretions (NODs), which may be applied on the basis of national circumstances, and their relevance under EDIS was frequently addressed in the context of the negotiations on EDIS in the European Parliament and the Council. In this context, the purpose of the study is to provide an overview of the current use of NODs in the Member States and contribute to the discussion regarding their treatment under EDIS, by formulating policy recommendations, including in view of the impact on EDIS in terms of financial exposure and administrative burden.
Author: Christos Gortsos
Publisher:
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
Even though the primary function of deposit guarantee schemes (DGSs) is to serve as 'paybox' for bank depositors, provide protection to retail depositors, act as a buffer in the event of a banking crisis and contribute to safeguarding the stability of the banking system, DGSs' financial means may also be used in order to contribute to the financing of bank resolution, where the conditions for resolution are met. The main focus of the present study, structured in four Sections, is to discuss the existing EU rules governing the role of national DGSs in resolution financing under the Deposit Guarantee Schemes Directive (DGSD) and the Bank Recovery and Resolution Directive of the European Parliament and of the Council (BRRD). The role of the European Deposit Insurance Scheme (EDIS) and the Deposit Insurance Fund (DIF) (only for the Member States participating in the Single Supervisory Mechanism (SSM)) in resolution financing on the basis of the Commission's (still pending) proposal for a Regulation is also briefly presented. Finally, the study addresses the existing asymmetries in the overall structure of the current and the upcoming system of EU banking law pertaining to the 'contribution to resolution financing' function of DGSs, and concludes with a modest proposal to overcome them.
Author: Ms.G. G. Garcia
Publisher: International Monetary Fund
ISBN: 1451850492
Category : Business & Economics
Languages : en
Pages : 64
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Book Description
The paper contrasts deposit protection with other forms of insurance, examines why goods and services of all kinds receive warranties and guarantees, and explores the particular characteristics of deposits and banks that merit deposit insurance. It examines a variety of reasons why countries choose to adopt systems of deposit insurance, the pitfalls that can arise from poorly designed schemes, and the features of a scheme that successfully avoids these pitfalls.
Author:
Publisher:
ISBN: 9789279988752
Category :
Languages : en
Pages :
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Book Description
In the European Union, the Deposit Guarantee Schemes Directive adopted in 2014 sets out rules and procedures to ensure depositor protection and is a key step towards harmonisation of deposit insurance in the European Union. It contains 22 national options and discretions (NODs) which Member States may apply to reflect specific national circumstances. The purpose of this study is to assess the respective national implementations of the NODs, including their practical impact on depositor protection, and to propose policy recommendations regarding their possible treatment under a reviewed DGSD or the European Deposit Insurance Scheme, under the assumption that the latter would take the form of a full insurance scheme. The analysis of the NODs is based on extensive surveys and interviews with representatives of national deposit guarantee schemes and authorities, including national competent authorities, central banks, Ministries of Finance, and banks. Based on the above analysis of the NODs, this study proposes alternative approaches for 12 NODs and full harmonisation for 3 NODs. It also recommends that 2 NODs could be retained in their current form while 5 NODs could be eliminated.
