Deposit insurance systems (DIS) play a key role in building confidence among depositors and helping keep their money safe. However, deposit insurance should never be considered a “magic bullet,” a “quick fix” or a stand-alone solution to maintain financial stability. The 2008 global financial crisis created a crisis of confidence in banking systems around the world. As a response, the number of countries with deposit insurance systems quickly shot up from 84 (in 2003) to 125 (in 2016). For the existing DIS, this period tested their design and effectiveness.
Over the past decade, the FIRST Initiative has funded 16 projects across the globe to assist in strengthening existing deposit insurance systems or establishing new ones. Drawing from these experiences, we recently published a Lessons Learned Note on the Challenges in Building Effective Deposit Insurance Systems in Developing Countries. — blog.wb.org/blogs