Since December 2009, the International Association of Deposit Insurers has been collaborating with the BCBS, the IMF, the World Bank, and the EC to develop a robust methodology to assess compliance with the core principles. A Steering Committee is coordinating this effort and has prepared a draft Methodology.
The core principles are reflective of, and designed to be adaptable to, a broad range of country circumstances, settings and structures. The core principles are intended as a voluntary framework for effective deposit insurance practices. National authorities are free to put in place supplementary measures that they deem necessary to achieve effective deposit insurance in their jurisdictions. The core principles are not designed to cover all the needs and circumstances of every deposit insurance system or prescribe a single specific form of deposit insurance. Instead, specific country circumstances should be considered in the context of existing laws and powers to fulfill the public policy objectives and mandate of the deposit insurance system.
A comprehensive, credible and action-oriented assessment should focus on the deposit insurance system and its relationship to the safety-net functions which support it. The assessment of the broader safety-net functions (i.e. preconditions) are mostly outside the jurisdiction of the deposit insurer, but, can have a direct effect on the deposit insurer’s ability to fullfill its mandate. The assessment of a deposit insurance system should identify strengths and weaknesses in the existing deposit insurance system and form a basis for remedial measures by deposit insurers and policymakers (eg government authorities or if it is primarily a private system, its member banks). The review of the broader safety net will need to rely on external reports – including, for example, recent Financial Sector Assessment Programme (FSAP)s – or include assessment teams members with the necessary expereince and skills. If no such reports are available then the assessment should indicate that there is insufficient information available for a complete review of preconditions.
Deadline for comments is 8 December 2010.
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