engleski

European deposit insurance systems in the time of crisis

Deposit insurance system was primarely created to protect depositors and their deposits. It creates depositors confidence in the banking system, thus preventing depositor panic and bank run of bank deposits especially in the time of crisis. Since most depositors do not possess adequate knowledge and professional experience, which is necessary to assess bank risks, the operation of deposit insurance system is justified in order to create trust in the banking system. It is believed that the depositor's trust in the banking system and the deposit insurance system ultimately contribute to the maintenance of banking stability. Despite the these significant positive effects of deposit insurance system there are also some negative aspects that have to be taken into account effects on bank stability. They refer to risky bank operations, reduced market discipline, moral hazard, negative selection and the principal-agent problem. Financial crisis in Europe started in 2008, points on the risk operations of banks in certain eurozone countries, which is often associated with high level protection of the deposit insurance system. To prevent depositor panic and further systemic banking crisis, in this period, national deposit insurance systems became more generous by introducing additional forms of protection (paybox plus protection, foreign currency deposits insurance, interbank deposits insurance and government support in raising funds regardless of the management of the system), increasing the amount of protection and leaving co- insurance. Therefore, the aim of this paper is to discuss about changes in the implemetation of the deposit insurance systems in Europen Union (EU) countries and selected Southeastern (SE) European countries in the time of financial crisis as well as changes resulting from the requirements of the banking union.

deposit insurance system ; bank stability ; financial crisis ; EU countries ; Southeastern European countries

Rad je financiran znanstvenim projektima Sveučilišta u Rijeci: ZP UNIRI 3/17, uniri- drustv-18-61. Indeksacija u bazama: ProQuest, EconBIZ, CPCI (Web of Science) i EconLit.