An evaluation of draft legislation on Russian depposit insurance

Abstract

On 18 November 2002, the Russian cabinet approved a plan to introduce deposit insurance.The introduction of deposit insurance is an essential condition for the modernisation of Russia s banking sector, and, in particular, for ending the near-monopoly of Sberbank, the State Savings Bank, in the retail segment.In this note, we compare the main features of the proposed system with its European and US equivalents.Although several important aspects of the Russian scheme have yet to be defined, our initial evaluation is positive.Concerns about the stability of the Russian banking system, however, remain