Deposit Insurance Systems
The main public policy objectives of a deposit insurer are to reimburse depositors after bankfailure and to contribute to the stability of a financial system. To achieve these objectivesand to build public confidence in a deposit insurance system, deposit insurers musthave operational readiness to be able to act quickly after a bank failure. Sound fundingarrangements are essential aspects of such readiness, as they ensure prompt reimbursementof insured depositors and sufficient funds for the deposit insurer to unwind the institution.Depositor confidence depends, in part, on knowing that adequate funds for depositinsurance would always be available to ensure the prompt reimbursement of their claims. Itis therefore considered a best practice to build credible ex-ante funding mechanisms whichhave the financial capacity to ensure that these obligations are met.
Main Authors: | , |
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Format: | Report biblioteca |
Language: | English |
Published: |
World Bank, Vienna
2017-11
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Subjects: | DEPOSIT INSURANCE, RISK MANAGEMENT, INVESTMENT, BUSINESS CYCLES, CONTINGENCY PLANNING, STRESS TESTING, |
Online Access: | http://documents.worldbank.org/curated/en/824821511878338917/Deposit-insurance-systems-addressing-emerging-challenges-in-funding-investment-risk-based-contributions-and-stress-testing https://hdl.handle.net/10986/28949 |
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Summary: | The main public policy objectives of a
deposit insurer are to reimburse depositors after
bankfailure and to contribute to the stability of a
financial system. To achieve these objectivesand to build
public confidence in a deposit insurance system, deposit
insurers musthave operational readiness to be able to act
quickly after a bank failure. Sound fundingarrangements are
essential aspects of such readiness, as they ensure prompt
reimbursementof insured depositors and sufficient funds for
the deposit insurer to unwind the institution.Depositor
confidence depends, in part, on knowing that adequate funds
for depositinsurance would always be available to ensure the
prompt reimbursement of their claims. Itis therefore
considered a best practice to build credible ex-ante funding
mechanisms whichhave the financial capacity to ensure that
these obligations are met. |
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