Deposit insurance and financial stability schemes

AEGNew York, April 2012

nadim.ahmad@oecd.org

Background

• Various schemes introduced by governments in wake of recent financial crisis to provide financial stability and to protect depositors.

• Raise a number of questions concerning treatment in the NA

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Stability fee and deposit insurance schemes

• Compulsory payments levied by government– May or may not be hypothecated to a

special fund – Which may or may not be hypothecated

only to support the institutions that pay in to the fund.

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Proposals

• Paid into a consolidated fund (not hypothecated) = tax – Or should there be a caveat in cases where the

payments into the fund are broadly equal to expected payouts?

• Paid into hypothecated fund, – with sums paid in exceeding expected payouts

= tax – with sums paid in broadly equalling expected

payouts = (insurance) service? Or should these always be treated as taxes for simplicity?

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Deposit protection scheme

• Key issue: treatment of priority claims and acquisition of assets by government to redistribute to depositors as part of government’s deposits guarantee

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Proposal

• Any positive difference between assets acquired by government and redistributed to depositors = service payment

• Any additional levy imposed by government to make up for any shortfall = tax.

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AEG

• Asked to consider proposals• And whether any additional

guidance should be developed for GFS manual?

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