The proliferation of banking and financial crises during the 1980s and 1990s has led a large number of countries to institute, or consider instituting, an explicit system of deposit insurance (see, for example, Lindgren, Garcia, and Saal, 1996).2 In fact, 30 of the 72 countries now known to have an explicit deposit insurance system established it during the past decade; 49 set up their systems in the past 20 years. During the 1990s, 33 countries reformed their deposit insurance systems, often to improve its incentive structure in light of experience.3
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