Financial and monetary issues Frankness and transparency are needed

There is consensus among the statements and writings of people in power, and the experts, in the media and on social media, on a treatment for the current crisis. Mostly, these various statements address the “protection of small depositors,” recapitalizing banks, and rescheduling or restructuring the public debt.

86 percent of depositors are protected

Small depositors are defined as holders of less than LL75 million ($50,000 – according to the official exchange rate). This is the amount insured by the National Institute for the Guarantee of Deposits according to new legislation. This guarantee covers a broad segment of depositors, nearly 2.5 million people, or 86 percent of all bank customers. The size of the deposits guaranteed by law is close to $32 billion, or a little less than 22 percent of total deposits as at end of February 2020.

Half of small deposits are in lira

Protecting small depositors in deeds, not in words, requires maintaining the stability of the lira’s exchange rate at its current LL1,507.5 level. The ability to guarantee deposits will weaken and will even stop given any further deterioration in the exchange rate. Approximately half of the deposits held by small