Along with the supervisory activities and the lender of last resort function, deposit guarantee is one of the basic elements of the safety net, which is aimed at the stability of the banking system.

Through deposit guarantee, the social function of savings and the monetary function of bank intermediation are recognised and supported, and in the event of a bank failure, traumatic effects on depositors may be avoided.

Protection is offered to the so-called "unaware (or not sophisticated) depositor", who, having no access to needed information, may not be able to evaluate the risk position of the financial institution where his or her deposits are kept.

Souce: http://www.fitd.it/en/deposit_guarantee/deposit_insurance.htm