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Deposit insurance design and bank regulation in South Africa

Charles C. Okeahalam (University of Witwatersrand, Department of Business Economics, Faculty of Commerce, Private Bag 3, Wits 2050, Johannesburg, South Africa)
Tudor Maxwell (Lecturer in Analytical Methods at the University of the Witwatersrand)

Journal of Financial Regulation and Compliance

ISSN: 1358-1988

Article publication date: 1 February 2001

343

Abstract

Explicit deposit insurance is a safety net that bank regulatory authorities use to attempt to prevent and mitigate the costs of bank failures. International experience has shown however that explicit deposit insurance can increase the risk‐taking behaviour of banks. In this paper the authors briefly explore the policy lessons and the implications of the relationship between deposit insurance design and bank system stability, relate this to a possible proposal for explicit deposit insurance design in South Africa and describe aspects of the proposed South African Deposit Insurance Scheme (SADIS).

Citation

Okeahalam, C.C. and Maxwell, T. (2001), "Deposit insurance design and bank regulation in South Africa", Journal of Financial Regulation and Compliance, Vol. 9 No. 2, pp. 136-150. https://doi.org/10.1108/eb025069

Publisher

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MCB UP Ltd

Copyright © 2001, MCB UP Limited

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