Deposit Coverage Limit

In today’s world the possibility of competition in the money market is unthinkable, the central bank regime is thought as if it were the only viable. Historically this has not been the case: Most monetary economists of the past have discussed the appropriate role of the state in the money market.  In general terms it is possible to identify certain schools of thought through time. It is the aim of this thesis to accurately describe and analyze the main points of each one and to provide a rough classification of them: 1) First of all, from times of Plato and Aristotle to the XIV century we can acknowledge the existence of two postures – Free minting, which ascribes a mere supervisory role or no role at all to the state and State Minting which pronounces  that the government has the duty and the obligation to intervene in the coinage trade; 1.1) A transitory period in the XV and XVI centuries in which the discussion is centered around the nature of “interest” and  the banking industry; 2) A period that goes from the XVIII to the XIX centuries. The role of the banking business has been accepted and the debates are conformed around the inter dependence of the monetary and financial systems.  Three different schools emerge: a Free Banking School which adheres to the principles of Laissez-faire in the money market;  a Central Banking “rule bounded” School which states that it is necessary to have a central monopolist entity that could keep the national metallic reserves by which it could provide a stable and redeemable money supply ; a Central Banking “discretional” School that manifests that money is endogenous to the economy, yet a central bank is needed for financial stability purposes.  2.1) We can identify a second transitory period in times of the Belle Époque of capitalism (1870-1930) which correctly takes the name of “monetary orthodoxy” and accepts the need of a Central Bank both to provide sound money – via a gold standard- and because its role as the lender of last resort of the economy; 3) A third period comes about the end of the great depression to our own time. First, a renewed Central Banking “discretional” School gains prominence and articulates a second role for the Central Bank: to actively pursue policy objectives (economic activity and employment). For which it is necessary to adopt a fiat monetary system;  given the 70´s stagflation problems,  a rehabilitated Central Banking “rule bounded” school emerges and pin points the importance of stabilizing consumer prices via an unchanging fiat money supply; as alternative to this school, a Modern Laissez-Faire School appears which emphasizes the possibility of free market solutions to the money market via several options  - Hayek-Klein , a fiat private competition system; Selgin-White, a modern free banking approach; and Salerno-Huerta de Soto and Greenfield-Yeager as heterodox approaches.

Recent studies clearly show that the number of citizens who travel abroad is growing annually. Naturally, the main interest of tourists is sightseeing. Many tourists are focused on increasing their awareness of an interesting part of the world or going to a resort to relax or to recover for health reasons. With these intentions, tourists rarely think about the negative possibilities, accidents and hazards that can occur during travel (e.g. sudden sickness, fractures, various traumas, loss of documents, loss of luggage prior to issuing a visa. Therefore the importance of travel insurance is revealed. However, some travel problems might be arranged by the tourist agency in terms of giving clear instruction before their leaving, but no one is insured by unexpectedness that might be encountered to any tourist, etc.). Studies concerning insurance reveal that only the insurance company can assist a tourist in an extreme situation. Every developed country should require travel insurance as a basic requirement.

The article considers the concept of bank deposits protection mechanism and suggests approaches to their classification. Features of the bank deposit insurance systems are examined. The author analyses the international experience of deposit insurance schemes functioning and defines economic policy measures to improve the national private deposit guarantee system.