What is Deposit Insurance?

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Accepted Answer

Deposit Insurance is a financial safety net that protects depositors' funds held in banks and other financial institutions against the risk of institutional failure, thereby promoting financial stability and public confidence in the banking system. This protection is typically administered by a government-backed entity, such as the Federal Deposit Insurance Corporation (FDIC) in the United States or the Financial Services Compensation Scheme (FSCS) in the United Kingdom, and is subject to specific coverage limits per depositor, per institution, per ownership category.

Deposit Insurance

What is Deposit Insurance?

What is the primary function of Deposit Insurance and how does it prevent systemic financial instability and bank runs?

How do coverage limits for Deposit Insurance vary across major global jurisdictions, and what factors influence these amounts?

What types of financial products and accounts are covered by Deposit Insurance, and what common misconceptions exist regarding non-covered assets?

What is the relationship between Deposit Insurance and regulatory compliance, particularly concerning Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements?

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