Deposit insurance boosts retail deposits, levels playing field for banks
The study looked at how deposit insurance in Russia affected banks and depositors. Banks in the new deposit-insurance system saw an increase in retail deposits and a decrease in reliance on State-owned banks. The longer a bank was in the system, the more deposits it had. This change helped level the playing field between State-owned and privately owned banks. However, there was also an increase in risky behavior by banks after deposit insurance was implemented.