Abstract
Optimized funding enables deposit insurers to establish an adequately funded ex ante DIF over a medium and longer time frame using regular adjustment of target funding in accordance to the DIS’s risk exposure and thus regular adjustment of the DIS funding to its needs. Deposit insurers use financial planning, target funding and risk assessment in iterations of a comprehensive financial planning cycle to ensure optimized funding.
This chapter explains optimized funding and the use of established target funding for the purpose of assessing the sufficiency of DIFs. It explores cases when the DIS faces liquidity and solvency issues due to the DIF’s inadequacy. It explains how to assess the sufficiency of funding for restoring liquidity and solvency and build long-term DIS credibility.
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Ellis, Diane. 2013. Deposit Insurance Funding: Assuring Confidence. https://www.fdic.gov/deposit/insurance/assuringconfidence.pdf. Accessed 2016.
IADI. 2009. Guidance Paper: Funding of Deposit Insurance Systems. Basel. IADI.
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Ognjenovic, D. (2017). Optimized Funding. In: Deposit Insurance Schemes. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-51143-6_5
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DOI: https://doi.org/10.1007/978-3-319-51143-6_5
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Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-51142-9
Online ISBN: 978-3-319-51143-6
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