- Deposit insurance schemes — Deposit protection schemes — European Central Bank — International Monetary Fund (IMF)
The 2008–11 Icelandic financial crisis involved the collapse of all three of the country’s major banks. All domestic assets were transferred to new public-owned domestic versions of the banks, while leaving the foreign parts in receivership and liquidation. The Icesave case relates to the dispute between Iceland, on the one hand, and the United Kingdom and Netherlands, on the other, over the protection of depositors with the UK and Dutch branches. A few years later, in Cyprus, a €10 billion international bailout by the Eurogroup, European Commission, European Central Bank, and International Monetary Fund was announced, in return for Cyprus closing its second-largest bank, the Cyprus Popular Bank, and imposing a one-time bank deposit levy on uninsured deposits of the Cyprus Popular Bank and the Bank of Cyprus. This chapter discusses the two cases, focusing on their impact and the lessons learnt in relation to deposit insurance arrangements.
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