This paper analyzes the impact of deposit insurance on the banking system's stability. The analysis is based on a review of the relevant literature dealing with the issue of deposit insurance. The aim of this paper is to determine the direction of the impact of deposit insurance on the stability of the banking system. Based on the reviewed research results, it can be concluded that the direction of the impact of deposit insurance on banking system stability is not influenced by the mere introduction of the mechanism itself but by the (nonfulfillment of certain conditions necessary for its optimal application.
Аhmedin Lekpek (Wed,) studied this question.