Thus, the overall organization retains the same capital levels without the structure of capital regulation creating an incentive to add risk to the system. 3 While deposit insurance helps mitigate the incentive for many depositors to run, it cannot fully eliminate this risk.
The world over, the development process is anchored on the pursuit of sound macroeconomic policies that will promote sustainable economic growth, create more jobs, and ensure equitable distribution of income to raise the living standard of the populace.