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The case for private administration of deposit guarantee schemes

Author

Listed:
  • Bruno Meyerhof Salama

    (Bruno Meyerhof Salama)

  • Vicente P. Braga

    (Focaccia Amaral Law Firm in São Paulo)

Abstract

We make the case that the responsibility for appointing board members in Deposit Guarantee Schemes (DGS) for commercial banks should be entrusted to the industry. In doing so, we challenge the position adopted by the International Monetary Fund, which has proposed public DGSs as the best practice. We lay out the comparative advantages of private over public DGS administration, and contend that the role of the government should in principle be limited to regulating DGSs specifically and financial markets in general. We conclude that the current worldwide trend towards greater involvement of government in financial regulation should not be extended to the administration of DGSs.

Suggested Citation

  • Bruno Meyerhof Salama & Vicente P. Braga, 2023. "The case for private administration of deposit guarantee schemes," Journal of Banking Regulation, Palgrave Macmillan, vol. 24(1), pages 51-65, March.
    • Handle: RePEc:pal:jbkreg:v:24:y:2023:i:1:d:10.1057_s41261-021-00188-8
    DOI: 10.1057/s41261-021-00188-8
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    References listed on IDEAS

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    More about this item

    Keywords

    Deposit insurance; Deposit guarantee scheme; Financial regulation; Management;
    All these keywords.

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K33 - Law and Economics - - Other Substantive Areas of Law - - - International Law

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