Safeguarding deposits: Learning from experience

Safeguarding deposits: Learning from experience

Descripción

Saving is a fundamental human activity and savings can take many forms. This publication, however, is concerned only with money deposited for the joint purposes of earning a return and security. Individuals and societies vary in the extent to which they save in the form of money. They differ as well in the basic motivation for the saving process. Motives, in general, are composite and include: saving as a store of value, saving for future contingencies and saving in the sense of accu mulation for future investment. When saving deposits are made, then the savings instrument itself is also viewed as an income-generating investment. Different individuals vary as to which motive or mix of motives is applicable. Despite differences in the motivations of savers, one expectation is common to all. The issue of the safety of the deposits is vital. This book addresses some of the issues involved in ensuring that the savings deposits of the public are secure. It highlights the key roles played by an appropriate regulatory environment, by depositor education and, above all, by sound management of financial intermediaries. In addition, it outlines the points for and against risk management mechanisms such as deposit insurance and also outlines rehabilitation measures which can be taken following a bank crisis.