Features, principles, and functions of the bank deposit insurance system

The article is devoted to the study of the characteristic features, principles of construction, and functional content of the bank deposit insurance system in Ukraine. The author focuses on the key role of the deposit guarantee system in ensuring financial stability, protecting depositors’ rights, increasing confidence in the banking system, and activating the investment potential of the population. The article analyzes current legislation, international standards, in particular the Core Principles of the International Association of Deposit Insurers (IADI), as well as the evolution of legal regulation of the bank deposit insurance system, taking into account the changes of 2022. The article classifies the principles of the bank deposit insurance system according to various criteria: source of funding (specialized and non-specialized), participants (banks, depositors, regulators), and significance (basic and additional). The article highlights and justifies the advisability of enshrining the following basic principles of the bank deposit insurance system in law: mandatory participation of banks in the bank deposit insurance system, risk reduction, accumulation of contributions, limited compensation, and information transparency. Their importance for harmonizing the national bank deposit insurance system with international standards is emphasized separately. It is proposed to enshrine the basic principles in the Law of Ukraine «On the System of Guaranteeing Deposits of Individuals». Five key functions of the bank deposit insurance system are also outlined: risk (reducing the negative impact of inflationary, credit, and political risks), regulatory (segmentation of the banking system and admission control), social (protection of low-income depositors), investment (transformation of savings into investments), and economic (stimulating the growth of the resource base of banks). The paper formulates the author’s vision of the role and prospects for the development of the bank deposit insurance system in the financial architecture of the state.