The non‐payout functions of deposit insurance schemes

Abstract

AbstractInstitutional and functional development of entities responsible for the provision of deposit insurance remains a marginal area of scientific research. The literature does not offer comprehensive analyses of the organization of deposit guarantee schemes (DGS), including the identification of all their possible tasks supporting the performance of its main goal (deposit insurance). Nevertheless, the potential synergies and cost savings justify broad range of tasks that could be carried out by DGSs in order to facilitate their functioning. At the same time, the problem of the functional shape of DGS is also of utmost practical importance. Therefore, the aim of this paper is to fill the identified gap by classifying the non‐payout functions and presenting the empirical review about them. To this end, the activities of 109 deposit guarantors around the world were analyzed. The review allowed to distinguish seven DGS functions supplementary to the payout of covered deposits, as well as to examine the interdependencies between the recognized roles and evaluate in terms of the DGSs' fulfillment of their objectives. Additionally, the advantages and disadvantages of every supplementary DGS activity were presented. The analysis allowed for the distinction of desired functions of deposit guarantee schemes.