Thursday, 19 January 2012

Better language: Deposit protection is a better term than deposit insurance

Deposit protection is more suggestive of the hierarchy which must exist for deposits to be protected by the state. Deposit insurance sounds more like a free market arrangement. It is possible to have insurance without a hierarchy. By necessity to have protection (on the other hand) one must be stronger than the other which is a hierarchy.

Deposit protection is a better term.

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