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Working Paper

A Deposit Insurance System for Armenia

We provide an overview of the design for a system of official deposit guarantees for the Republic of Armenia. This proposed design takes into consideration the overall structure of the Armenian economy, its official institutions and the financial system. Furthermore, we outline specific design features for the Armenian deposit insurance system that are consistent with the social welfare objectives that underpin arguments for its adoption, while minimizing the distortions of these government guarantees on incentives. Key among the design features are limited coverage of deposits, separation of deposit insurance from central banking, and extended liability of banks for losses incurred by the deposit insurance fund.

Working Papers of the Federal Reserve Bank of Cleveland are preliminary materials circulated to stimulate discussion and critical comment on research in progress. They may not have been subject to the formal editorial review accorded official Federal Reserve Bank of Cleveland publications. The views expressed in this paper are those of the authors and do not represent the views of the Federal Reserve Bank of Cleveland or the Federal Reserve System.

Suggested Citation

Manukyan, Artak. 2003. “A Deposit Insurance System for Armenia.” Federal Reserve Bank of Cleveland, Working Paper No. 03-06.