EDITORIAL: A buffer against bank failure
The benefits of deposit insurance outweigh the moral hazard that could be raised
Years in the making, the deposit insurance scheme aimed at protecting the most vulnerable bank customers and shoring up the stability of the SA financial system is moving a step closer to become part of banking regulation. That’s good news.
Endorsed by the Bretton Woods institutions such as the IMF and World Bank as best practice for developing countries, the scheme is already a ubiquitous feature in dozens of countries in the West, and its importance was reinforced during the financial crisis. It gave banking clients confidence that their money was safe, preventing bank runs that could have tipped lenders with already lopsided capital structures into insolvency despite largely being healthy...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.