The International Association of Deposit Insurers has concluded the revision of its Core Principles for Effective Deposit Insurance Systems and the Compliance Assessment Methodology, and has submitted them to the Financial Stability Board (FSB) for inclusion in the FSB’s Compendium of Key Standards for Sound Financial Systems.
The original Core Principles for Effective Deposit Insurance Systems, approved by FSB, were issued in June 2009, and are currently used by the International Monetary Fund (IMF) and World Bank (WB) in the context of the Financial Sector Assessment Program (FSAP) reviews, as well as by individual jurisdictions to assess the effectiveness of their deposit insurance systems and practices.
Lessons learnt from the recent financial global crisis and developments in the regulatory landscape have shown that revision would maintain their use as a flexible, internationally applicable standard. As a result, IADI established an IADI Steering Committee in February 2013 to undertake the revision. The Committee’s recommendations were submitted in January 2014 to a Joint Working Group (JWG) comprised of representatives from the Basel Committee on Banking Supervision (BCBS), European Commission (EC), European Forum of Deposit Insurers (EFDI), FSB, IMF, WB and IADI. The JWG has sought to achieve the right balance between raising the bar for more effective deposit insurance systems and retaining the Core Principles as a flexible, internationally applicable standard. On 21 October 2014, IADI’s Executive Council formally approved the revised Core Principles for submission to the FSB.
The revised Core Principles strengthen the deposit insurance standards in several areas including reimbursement speed, coverage, funding and governance, adding more guidance on the deposit insurer’s role in crisis preparedness and management. The revised document also reflects the greater role played by many deposit insurers in resolution regimes while continuing to accommodate a diverse range of deposit insurance systems.
The revised Core Principles may be viewed here.
