Against the Grain: The Unusual Case of Saskatchewan’s Credit Union Deposit Insurance Scheme

In response to the financial crisis, governments the world over took unprecedented steps to right-size their economies by introducing unprecedented (in recent memory) fiscal stimulus, announcing policies to purchase billions of dollars of “toxic” assets, taking over failing banks, and deploying “quantitative easing.” While these measures continue to generate considerable academic, policy, and public scrutiny, far less attention has been paid to the concurrent move to introduce, alter, or merely review the deposit insurance schemes that backstop depositors in the event of a bank failure. It may be that the relative quiescence around these policy efforts underlines the remarkable expansion and acceptance of these schemes as solutions to the age-old problem of how to avoid bank runs and their attendant economic consequences.¹ As recently as 1980, there were fewer than twenty countries with deposit insurance schemes (Demirgüç-Kunt, Kane, and Leaven 2008). Since then, the policy has become almost universal, with deposit insurance schemes now in 143 out of 195 countries (IADI 2018).

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