For these reasons, the depositor protection should be taken seriously. If a jurisdiction has a deposit insurance system, then the profit of the depositor will be protected promptly. Hence, the loss of depositors will be extremely minimised. However, in case the bank run happens in a state that does not have a deposit insurance system, most depositors’ interest will not be guaranteed. And then, the panic will spread among the depositor which will harm the financial stability as well.   

The object proposed by the BCBS and IADI is to maximise the financial stability and the profit of depositors. And through the effective efforts, at present the IADI has “63 deposit insurers which from 62 different jurisdictions” and it is clear that the financial situation is becoming better and better after the crisis. Therefore, the target of the deposit insurance system is precise in essence.     

The governance

The original words of this rule are “the deposit insurer should be operationally independent, transparent, accountable and insulated from undue political and industry influence.”