Georgia's challenge: deposit insurance

Abstract

One of the classic debates among economists arises when it comes to the use of security instruments such as deposit insurance. It is the transfer of the security function of the central bank to the commercial banks. From this point of view, deposit insurance implies the release of central banks from supervision and the transfer of the right of monitoring of banks' payment obligations to the deposit insurance market institution. Accordingly, the main function of the central bank remains monetary policy.