Contribution to the introduction of an explicit deposit insurance system in WAEMU countries: A theoretical and empirical essay.

Summary The objective of this thesis is to present a theoretical and empirical attempt to put into perspective an explicit deposit insurance system in WAEMU countries. Unlike most studies and works on developing countries, this reflection has been absent for a long time in WAEMU countries. The latter are among the developing countries that have not yet put in place an explicit guarantee for depositors' savings. It seems to be a priority for these countries at present for several reasons: the consequences of the bank failures of the 1980s in particular on depositors and banks; the considerable development of informal finance due to the deterioration of the general public's confidence in formal intermediation; the low rate of savings and bank penetration; and the low degree of financial deepening and relatively high level of banking fragility in several of these countries. More specifically, this study has a twofold objective: (1) first, to examine the rationale for and desirability of a deposit insurance scheme in WAEMU countries, drawing on the recent literature on the effectiveness of deposit insurance in developing countries. (2) and then establish an attempt to implicitly price the deposit insurance premium for banks in these countries. We propose a specification of an econometric model to capture banking, financial, macroeconomic and institutional indicators of this implicit premium. Also, through this implicit premium, we present another measure of risk for banks in these countries. Our main results lead us to highlight the need to take into account banking, financial, macroeconomic and institutional aspects for these countries in any risk management of banks and, by implication, in any insurance premium pricing program.