South Korea to Lift Deposit Insurance Cap First Time in 24 years

South Korea will double the deposit insurance limit to 100 million won ($71,174) per client from September, raising the cap for the first time in nearly a quarter of a century to boost confidence in the banking system.

The change will partially affect money markets as consumers may move their funds to high-interest paying institutions, such as savings banks, from commercial banks, the Financial Services Commission said in an emailed statement Thursday. The potential flight of deposits is likely to result in commercial banks tapping the bond markets in order to replenish their coffers, the FSC added.