In particular, the rapid integration of the wholesale and capital markets, as well as large-value payment systems, has already produced more and new kinds of linkages among banks. As a result, banks are increasingly exposed to risks originating from abroad, and risks to financial stability are less and less confined to national borders.
I shall now try and provide a brief description of how both the idea of deposit insurance itself and the way in which it is provided relate to the five broad objectives of financial sector development.