Now banks face bail-in, should we rethink deposit insurance?

David Mayes argues deposit insurance may impose unnecessary costs

The current deposit insurance system in many countries is the result of rapid responses to a major unexpected crisis, made worse by major deficiencies in the ability to handle such crises. Now the problems of crisis management are being addressed, with resolution plans for systemically important banks involving the bailing in of creditors, perhaps it is time to review what deposit insurance should look like in the new normal environment, rather than lock in more expensive arrangements that were

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