Considerations Concerning Guarantee Schemes

When a large withdrawal from banks occurs, customers withdraw their deposits, so banks are likely to go bankrupt because of liquidity problems. There are several mechanisms that allow the banking system to avoid the phenomenon of massive withdrawals from banks. The most effective one is the deposit insurance. The deposit insurance is seen primarily as a means of protecting depositors of credit institutions, and secondly as a means of ensuring the stability of the banking system. This article described deposit guarantee scheme in Romania and other country.