Publication: Deposit Insurance Systems: Addressing Emerging Challenges in Funding, Investment, Risk-Based Contributions and Stress Testing
Date
2017-11
ISSN
Published
2017-11
Author(s)
Nolte, Jan P.
Khan, Isfandyar Z.
Abstract
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.
Citation
“Nolte, Jan P.; Khan, Isfandyar Z.. 2017. Deposit Insurance Systems; Deposit Insurance Systems : Addressing Emerging Challenges in Funding, Investment, Risk-Based Contributions and Stress Testing. © World Bank, Vienna. http://openknowledge.worldbank.org/handle/10986/28949 License: CC BY 3.0 IGO.”