Revolutionizing deposit insurance: Adjusting premiums based on financial risk index
The article suggests a new way to calculate deposit insurance premiums for banks and savings institutions based on their financial risk. By using a financial risk index, the system can adjust premiums to reflect the actual risk each institution poses. This approach aims to make the insurance system fairer and more efficient. The study shows that this method can be implemented without the need for new laws, and it can lead to a more dynamic system for distributing dividends based on risk levels.