The deposit insurance system as a mechanism for enhancing financial stability and protecting depositors: An analytical study of the Algerian experience

Hamlil Abdelhak; Hamlil Bachir

doi:10.55094/hoec.3144

Authors

Hamlil Abdelhak Abou Bekr Belkaid University / Algeria 0009-0009-7847-7419
Hamlil Bachir Djillali Liabès University / Algeria 0000-0003-3131-7273

10.55094/hoec.3144

Abstract

The effectiveness of the banking sector in mobilizing savings largely depends on the existence of reliable mechanisms for protecting depositors’ funds. Without adequate protection, public confidence declines, weakening the role of banks in financial intermediation and economic development. In Algeria, the legislator, through Monetary and Banking Law No. 23-09, and the regulatory authority, through Regulation No. 20-03 issued by the Monetary and Banking Council, established a mandatory deposit insurance framework requiring banks to participate in the Deposit Guarantee Fund. This mechanism aims to compensate depositors in the event of bank failure and to enhance trust in the national banking system. This study analyzes the legal and institutional framework of the Algerian deposit insurance system and evaluates its effectiveness in strengthening financial stability and protecting depositors.

Keywords:

Deposit Insurance Banking Stability Deposit Guarantee Fund Financial Regulation Algeria

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