The International Monetary Fund has published a Monetary and Capital Markets Department staff paper updating IMF staff views on how to design and strengthen deposit insurance systems, last comprehensively set out in 2006. It frames effective deposit insurance as a core element of the financial safety net, calling for strong governance, mandatory membership for all banks, and coverage calibrated to protect most retail depositors. Key recommendations include ex ante funded deposit insurance funds with predetermined funding targets informed by expert judgement and supported by a readily available public backstop, and insuring foreign currency deposits where they are widely used. The paper supports widening narrow “paybox” schemes so deposit insurance funds can contribute to bank resolution, subject to safeguards such as a least-cost test and close coordination with resolution authorities, and it recommends depositor preference to improve recoveries and support resolution funding. It highlights operational and policy challenges including materially shorter depositor access and payout timeframes in a 24/7 payments environment, and adapting coverage and recordkeeping approaches to fintech products and new deposit-like business models.
International Monetary Fund 2026-03-25
International Monetary Fund staff paper updates deposit insurance guidance with public backstops and stronger links to bank resolution
The International Monetary Fund has updated its views on designing and strengthening deposit insurance systems, emphasizing strong governance, mandatory bank membership, and coverage to protect most retail depositors. Key recommendations include ex ante funded insurance with public backstops, insuring foreign currency deposits, and expanding deposit insurance roles in bank resolution. The paper also addresses challenges such as shorter depositor access times and adapting to fintech products.