Abstract

This chapter presents the role that the modern explicit deposit insurance scheme (DIS) plays in ensuring financial stability of any country, especially since 2008, when many national jurisdictions enhanced the key features of their established DISs in order to preserve public trust. Given its historical evolution, the DIS’s mandate and powers have developed significantly but its primary goal remained the same, to enable depositors to have fast access to their funds deposited at failing banks. It discusses the origins of the DIS, different types and mandates, significance of the FDIC and the current role of the modern DIS within the financial stability safety net and in the bank resolution process.

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