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Deposit Insurance Seminar for Central Asia, Mongolia and Azerbaijan - Basel, Switzerland, 29 - 31 January 2003.
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STRUCTURE & ORGANIZATION
Presentation by:Ms. Roumyana Markova
Chief Expert, International CooperationDeposit Insurance Fund (Bulgaria)
www.iadi.org
Thursday, January 30, 2003
Purpose of this Presentation
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1) Identify the relevant structural and organizational issues for deposit insurance systems.
2) Examine the advantages, disadvantages, and trade-offs associated with various approaches.
3) Make some suggestions on the appropriate form of guidance with respect to these issues.
I. Mandates, roles and responsibilities
Setting of mandates, roles and responsibilities influenced by many factors.
Linkages between mandates and its public policy objectives and country circumstances need to be consistent.
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Mandates…(con’t)
The more mandates are defined (in law or private contract) the better.
In order to meet its mandate and discharge its responsibilities an insurer should have access to requisite information on its members.
Changing conditions require periodic reviews for mandates.
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II. Governance arrangements
Many forms of governance available:
- separate legal entity
- predominantly private or public forms of governance
- each choice has advantages/disadvantages and is influenced by choice of mandates, country resources, etc...
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Governance (con’t)
Composition of governing body: issues to consider:
- Should include officials who have authority to make decisions and meet “fit-and-proper” tests.
- Include views of other safety-net players.
- Predominantly privately-administered schemes often include industry representatives. Public schemes can include input from special advisory bodies.
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Governance (con’t)
Setting out duties and responsibilities:
- Select, oversee and review management.
- Ensure effective operational control and risk management processes.
- Authority to remove officers, deal with confidentiality, conflict of interest and other ethical issues.
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Governance (con’t)
Other governance issues:
Internal control
Accountability
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Governance (con’t)
Transparency and disclosure:
- Information on the DIS should be made available to and understood by relevant stakeholders.
- Need to balance the benefits of disclosure with the need to maintain confidentiality.
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III. Human resource issues
Key issues include:
- dedicated employees vs. outsourcing
- compensation and benefits
- succession planning, training and development
- collaborative training and exchanges
Human resources (con’t)
- Information sharing and confidentiality provisions for employees.
- Some systems hold employees personally liable for actions taken on behalf of their organizations.
- FSF Study Group recognized the importance of statutory indemnification and employee protection.
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Conclusions
1) Mandates, roles & responsibilities vary widely among DIS. What is critical is that the mandates be defined and that there be consistency between public-policy objectives and mandates.
2) In order to discharge mandates, a DIS needs timely access to requisite information.
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Conclusions (con’t)
3) Governance arrangements:- Composition should include those who are fit and
proper and free from conflicts of interest. - Sound risk management, good internal control and
transparency and accountability are important.
4) Human resources:- Attracting and retaining skilled employees is a key
challenge. It is important to provide employees with legal protection from indemnification for their actions.
STRUCTURE & ORGANIZATION
Presentation by:Ms. Roumyana Markova
Chief Expert, International CooperationDeposit Insurance Fund (Bulgaria)
www.iadi.org
Thursday, January 30, 2003
