Deposit insurance - not a panacea against default?

Banks Finansy09-10-2008 Deposit insurance - not a panacea against default? Deposit insurance system - a reliable protection of deposits of citizens, but it is not designed for large-scale crisis. If the state does not want to lose the banking sector, he would have to compensate for the contributions to the burned-out banks from their reserve funds. Authorities seek to stem panic among the citizens, so they do not run on a rumor about a crisis withdraw their deposits from banks. Banks are suffering from the credit (and already debt) crisis, not bear scare investors - panic can lead to disaster in the financial sector. "Today, investors have no reason to fear for their savings, efficient system of deposit insurance", - said Russian presidential aide Arkady Dvorkovich in an interview with Deutsche Welle. Moreover, the deposit insurance system deputies want to "improve". At the meeting of the State Duma adopted on first reading a bill on raising the level of insurance reimbursement for private contributions to 700 thousand rubles. We recall today the maximum amount of insurance compensation for private deposits is 400 thousand rubles. It is obvious that the main objective of this measure - a purely psychological. On the background of rising interest rates on deposits by some banks, it can calm people and encourage them, if not make new contributions, at least not to withdraw money from deposits.