Strengthening financial stability through deposit insurance scheme

In the current regulatory environment, are depositors’ funds guaranteed in the likely event that a particular bank goes bust? Do regulators have unambiguous resolution framework that provides for reimbursement of depositors in the event of a bank failure?

These are some of the hotly debated topics in recent times particularly following the global recession. The aftermath of the 2007/2008 global financial crisis has brought with it a plethora of regulations laced with a layer of fees particularly in the banking sector, a phenomenon that is supposedly aimed at minimising idiosyncratic risks in the banking system, with the initial objective of protecting tax payers’ funds used to bail out banks in financial distress.