- August 30, 2023
- Posted by: admin
- Categories: Current News, Financial Sector Management
To support deposit insurers in the region in achieving their intended objectives, MEFMI conducted a virtual workshop on Strengthening the Role of Deposit Insurers in Supporting Financial Stability from 5 – 8 June 2023. The workshop was held in collaboration with the West African Institute for Financial and Economic Management (WAIFEM) and Toronto Centre.
The main objectives of a deposit insurance system are to protect small depositors when banks fail, improve public confidence in the financial system, and by so doing, contribute to the stability of the financial system. These objectives can only be achieved by a well-constructed and credible deposit insurance scheme. In this regard, the International Association of Deposit Insurers (IADI) Core Principles for Effective Deposit Insurance Systems provide an important benchmark for designing and operating effective deposit insurance schemes.
While it is not uncommon for banks to fail, managing bank failures is a costly and complex process. Deposit insurance provides a way to mitigate the cost of bank failures. Conceptually, deposit insurance is a bank deposit guarantee scheme that ensures that depositors are reimbursed a part or all of their deposits in the event of bank failure. By assuring depositors that their deposits will be safe even in the case of a bank failure, deposit insurance plays a critical part as a financial safety net.
A total of 95 officials from nine (9) MEFMI member countries and four (4) WAIFEM countries participated in the workshop. Forty-three (45%) of the participants were female while the remainder (52 participants, 55%) were male. The officials are expected to utilise the knowledge gained from the workshop to support efforts to strengthen deposit insurance and resolution arrangements in their respective jurisdictions.