Government provision of a financial safety net for banks and other financial

institutions has been a key element of the policy response to the current financial

crisis. In the process, the design of many safety net elements, such as deposit

insurance, has been redrawn in many jurisdictions. In particular, governments

extended existing guarantees and introduced new ones. While these measures did

not address the root causes of the lack of confidence, they were nevertheless

helpful in avoiding a further accelerated loss of confidence, thus buying valuable

time.