An Investigation Into the Role of Deposit Insurance in Kenya's Banking Sector Stability
Abstract
This paper focuses on the relationship between deposit insurance and
systemic stability in the banking system, drawing on the Kenyan experience.
Specifically the paper seeks to establish whether the introduction of the
Deposit Protection Fund (DPF) has had a positive or negative effect on
Kenya's Banking Sector stability
The study focused on two sets of time periods i.e. Pre-DPF (1969-1985) and
Post-DPF (1986-2002) periods. A 2 group experiment design was used to
compare the general levels of fragility for the two time periods.
The study finds that the level of banking sector stability is higher in the Pre-
DPF than during the Post-DPF period. Overall results indicate that banking
sector fragility is very high - level IV - the class with the highest level of
fragility.
Citation
Masters of business administrationSponsorhip
University of NairobiPublisher
School of business,University of Nairobi