Question

In order to optimize the design features of deposit insurance scheme, Core Principles (Best Practices) recommended guidelines for the membership of banks in the deposit insurance corporation, the size of coverage limit provided, and the awareness level about the existence of deposit insurance corporation in the country, discuss the importance of these core principles in light of its effect on the stability of the financial system.

Answer 1

The core principles of deposit Insurance scheme will be including these factors-

A. Public policy objectives- these are the guidelines which are to be issued and objectives which are to be achieved through the deposit insurance schemes and the set of guidelines for the membership of the banks in the deposit Insurance corporation.

B. Cross border issues will also be determining the core principles of deposit Insurance scheme and it will help in taking up with cross border issues and solving them in order to help the deposit insurance bankers

C.governance regarding to deposit insurance should be properly structured and it should be helpful in determination of rules and regulations which will be helpful for various kinds of market participants participating in deposit insurance.

D. Crisis management is another important aspect of core principles which are to be followed which will help in management of adverse scenario.

E. Deposit insurance role in the planning of various contingent events will help in determining the deposit insurance role in contingency planning and help in solving a with futuristic issues