Deposit insurance development (on the example of Ukraine)

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The deposit insurance market is an essential subsystem of Ukraine’s financial infrastructure. The study aims to evaluate the development of deposit insurance in Ukraine based on the depth of deposit insurance, the implementation of the deposit guarantee function, the activity of the banking system and to identify their impact on the development of deposit insurance at various stages.
To determine the periods of deposit insurance in Ukraine, it was proposed to use the methodological toolkit of cluster analysis, having carried out the following stages: selecting input-defining features, variable standardization, applying the Ward procedure for the formation of clusters-periods, and financial and analytical interpretation of the results and characteristics of the periods obtained. Approbation of the proposed scientific and systematic approach allowed drawing conclusions regarding four stages of the development of deposit insurance in Ukraine from 2005–2020: completion of the formation (2005–2007), formedness and activity (2008–2013), performance under pressure (2014–2016), stabilization (2017–2020). While the first two stages, completion of formation and formedness and activity, were followed by a synchronous and slight increase in the level of the depth of the insurance system, the implementation of the deposit guarantee function and the activity of the banking system, the period of performance under pressure and the stabilization period demonstrated a desynchronization between the components.
The completion of the formation of deposit insurance (2005−2007) was followed by a synchronous and slight increase in the level of the depth of the insurance system, the implementation of the deposit guarantee function and the activity of the banking system.

Acknowledgment
Alina Bukhtiarova gratefully acknowledges financial support from the Ministry of Education and Science of Ukraine (0120U100473).
We are thankful to the Czech government support provided by the Ministry of Foreign Affairs of the Czech Republic, which allowed this scientific cooperation to start within the project “Enhancement of the PhD Students Potential For Qualitative Research In Ukraine”.

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    • Figure 1. Indicators selected for periodization of the development of deposit insurance
    • Figure 2. Integral indicators of the depth of the deposit insurance system, the deposit guarantee function implementation, and the banking system activity in 2005–2020
    • Figure 3. Dendrogram of the cluster analysis of deposit insurance development indicators in Ukraine in 2005−2020
    • Table 1. Ranking of integral indicators of the depth of the deposit insurance system, implementation of the deposit guarantee function, the banking system activity
    • Table 2. Generalized assessment of the depth of the deposit insurance system, the deposit guarantee function implementation, and the activity of Ukraine’s banking system in 2005–2020
    • Table 3. Dynamics of the components that shape the development of deposit insurance
    • Table А1. Deposit insurance indicators in Ukraine in 2005–2012
    • Table А2. Deposit insurance indicators in Ukraine in 2013–2020
    • Table А3. Standardized values of deposit insurance indicators in Ukraine in 2005–2012
    • Table A4. Standardized values of deposit insurance indicators in Ukraine in 2013–2020
    • Conceptualization
      Inna Shkolnyk, Andrii Semenog
    • Formal Analysis
      Inna Shkolnyk, Alina Bukhtiarova
    • Methodology
      Inna Shkolnyk, Andrii Semenog
    • Project administration
      Inna Shkolnyk, Dmytro Tkachenko
    • Supervision
      Dmytro Tkachenko, Alina Bukhtiarova
    • Validation
      Dmytro Tkachenko, Viktoriia Kremen
    • Writing – review & editing
      Dmytro Tkachenko, Andrii Semenog
    • Data curation
      Viktoriia Kremen, Alina Bukhtiarova
    • Visualization
      Viktoriia Kremen, Alina Bukhtiarova
    • Writing – original draft
      Viktoriia Kremen, Andrii Semenog