en     ru     jp
 
 
private banking
private banking
private banking
private banking
private banking
private banking
private banking
     
 
Home
      
Knowledge Base
      
Financial Glossary
      
Deposit insurance
       
 
Back

Deposit insurance

 Search definitions     
  Search  

Deposit insurance
A system that guarantees that people who Deposit their money in a financial Institution are protected if the Institution fails.
    
Depending on the type of account and ownership, this protection totals $100,000 or more. Two government agencies provide this type of coverage: the National Credit Union Administration insures credit unions, and the Federal Deposit Insurance Corporation covers banks. Some financial institutions buy similar coverage from private insurers.
    
Deposit insurance is a measure introduced by policy makers in many countries to protect deposits, in full or in part, in the event of a "run" on a bank or banks. The failure of a bank has the potential to Trigger a much broader spectrum of harmful events. Deposit insurance systems are one component of a financial system safety net that contributes to the promotion of financial stability.
    
The purpose of Deposit insurance varies from one country to another but in most cases they are designed to protect less financially sophisticated depositors and to contribute to financial stability in an environment where banks are allowed to lend, or use otherwise, most of the money that they receive as deposits instead of safe-keeping the full amounts (see fractional-reserve banking). Deposit insurance institutions are for the most part government run or established, and may or may not be a part of a country's Central Bank, while some are private entities with government backing or completely private entities.
Posted by  Institute for International Research
 
  Back  
  Print  
  Email  

 

private banking
private banking
private banking
private banking
private banking
private banking
private banking

 
Home News Library Newsletters Event Calendar Advertise About Contact FAQ
Privacy Policy     Terms of Service
 

©