Deposit insurance system as a guarantee of depositor’s protection
Keywords:
bank, banking system, household, income, deposit, saving, interest rates, UIRD, Individual Deposit Guarantee Fund, deposit insurance system, Deposit Guarantee Schemes.Abstract
The article examines the state and trends in the development of the deposit guarantee system for individuals in Ukraine. The challenges and needs of improving the mechanism of centralized insurance protection of depositors are identified. The authors emphasize the growing role of the Deposit Guarantee Fund of individuals in the banking market and expanding the scope of its modern mechanisms to reduce the negative effects of bank bankruptcy, which is an important factor in ensuring the stability of the banking system.
Emphasis is placed on considering the disposable income of domestic households, as this indicator is an eloquent indicator of improving the country’s economic well-being. Parallels were made in the analysis of quantitative indicators of state social guarantees, namely: the expression of the living wage and the amount of the minimum wage for 2016-2020.
The size of the household savings growing is estimated. The importance of converting household savings into investments for economic development is determined and the number of deposits and the value of deposits for households in 2016-2020 are analyzed. The authors also illustrate the dynamics of changes in the UIRD indicator.
The deposit guarantee system is presented as an important factor in the financial stability of the state economy. The article emphasizes the successful steps of legislative regulation of the subject composition of the Deposit Guarantee Fund of Ukraine and reformation of compensation limits, which brings the domestic insurance field closer to European standards of depositor’s protection.
According to the results of attracting deposits from the top-9 commercial banks of Ukraine, tables have been formed, the data in which allow making conclusions about the leaders of the deposit services market and the amount of potential reimbursement. Proposals have been formulated to improve the deposit guarantee system, aimed at optimizing insurance schemes and relations in accordance with the threats to financial security as an objective phenomenon of a market economy and the conditions of globalization.
References
Adema, J., Hainz, C., & Rhode, C. (2019). Deposit Insurance: System Design and Implementation Across Countries. Journal ifo DICE Report ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München, 17(1), 42-51. Retrieved from https://www.econstor.eu/handle/10419/199058
Czechowska, D. (2018). The essence of the Bank Guarantee Fund’s activity and related dilemmas in the context of banking system stability. Annales Etyka w życiu gospodarczym, 21(5):121. DOI: 10.18778/1899-2226.21.5.10
Danylenko, A. (2017). Evolving Ukraine’s deposit guarantee system towards global standards: a macroprudential perspective. Visnyk of the National Bank of Ukraine, 242, 14-27. DOI: 10.26531/vnbu2017.242.030
Debet-Kredyt (2021). Dovidnyky. Indeksy, minimumy [Debit-Credit Directories. Indices, minima]. Retrieved from https://services.dtkt.ua/catalogues/indexes/1
Directives 2014/49/EU and 2014/59/EU (2014). Official Journal of the European Union, L 173/149 and L 173/190.
Draft Law on Amendments to Some Laws of Ukraine to Ensure the Stability of the Deposit Guarantee System for Individuals. Retrieved from http://w1.c1.rada.gov.ua/pls/zweb2/webproc4_1?pf3511=72056
Gortsos, C. (2019). The Role of Deposit Guarantee Schemes (DGSS) in Resolution Financing. European Banking Institute Working Paper, 37. DOI: 10.2139/ssrn.3361750
Horsch, A., Sysoyeva, L., & Bogma, S. (2018). Deposit insurance systems of post-soviet countries: a comparative analysis. Journal of International Studies, 11(4), 22-44. DOI: 10.14254/2071-8330.2018/11-4/2
Individual Deposit Guarantee Fund of Ukraine. Statistics. Retrieved from https://www.fg.gov.ua/pro-fond/statistika-ta-zviti/statistika and https://www.fg.gov.ua/storage/files/eng2020.pdf
Kerlin, J. (2017). The Role of Deposit Guarantee Schemes as a Financial Safety Net in the European Union. Palgrave Macmillan Studies in Banking and Financial Institutions. DOI: 10.1007/978-3-319-54163-1
Koziriska, M. (2020). The scope of the Bank Guarantee Fund’s activities and its potential for extension. Problems and Opinions, 2(79). DOI: 10.26354/bb.5.2.79.2020
Law of Ukraine. On the System of Guaranteeing Natural Person Deposits. Retrieved from https://zakon.rada.gov.ua/laws/show/4452-17
Law of Ukraine. On Banks and Banking. Retrieved from https://zakon.rada.gov.ua/laws/show/2121-14
Mecatt, I. (2020). Deposit guarantee schemes and bank crisis management: legal challenges arising from the actual EU legal framework. Retrieved from https://www.srb.europa.eu/system/files/media/document/6._dgs_and_crisis_managment_2020_-_irene_mecatti.pdf
National Bank of Ukraine (2021). Financial Sector Statistics. Monetary Statistics. Retrieved from https://bank.gov.ua/en/statistic/sector-financial/data-sector-financial
Serpeninova, Y.S. (2014). Deposit Guarantee System in Ukraine: Problems and Perspectives after the financial crisis. Economics and Management: Problems of science and practice. Nurnberg, 2, 129-134.
Sova, O.Yu. (2018). Spetsyfika depozytnykh posluh u suchasnykh umovakh bankivskoho rynku Ukrainy [Features of deposit products in modern conditions of the banking market of Ukraine]. Financial and Credit Activity: Problems of Theory and Practice, 3(26), 72-80. DOI: 10.18371/fcaptp.v3i26.143865
State Statistics Service of Ukraine. (2021). Retrieved from https://ukrstat.org/uk/druk/publicat/kat_u/2021/zb/06/vrd_20_ue.pdf and http://www.ukrstat.gov.ua/druk/publicat/kat_u/2020/zb/02/zb_dvn2018.pdf
Žilinskas, R., & Gaižauskas, L. (2015). The investment policy of deposit guarantee funds under conditions of limited domestic securities markets. DOI: 10.15388/EKON.2015.1.5324
Downloads
Published
Issue
Section
License
Relationship between right holders and users shall be governed by the terms of the license Creative Commons Attribution – non-commercial – Distribution On Same Conditions 4.0 international (CC BY-NC-SA 4.0):https://creativecommons.org/licenses/by-nc-sa/4.0/deed.uk
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
