Guidance on Deposit Insurers’ Role in Contingency Planning and System-wide Crisis Preparedness and Management
The Core Principles for Effective Deposit Insurance Systems issued by the International Association of Deposit Insurers (IADI) outline the roles and responsibilities of the deposit insurer in contingency planning and crisis preparedness and management (Core Principle 6). Depending on the design of the institutional and regulatory framework in a jurisdiction, the mandates of deposit insurers may differ. However, there are elements of contingency planning and crisis preparedness and management that are applicable to all deposit insurers.
Deposit insurers need to engage in a variety of preparatory activities aimed at identifying and preparing for events that may affect normal functioning. Contingency planning or crisis preparedness exercises enable the testing of the effectiveness of plans to handle extraordinary situations and seek to ensure that the deposit insurer can perform the role according to its mandate in the event of a system-wide crisis.
This Guidance Paper reviews current practices among IADI members and provides a direction for the implementation and strengthening of deposit insurers’ contingency planning and crisis preparedness and management frameworks. It is recognised, however, that such direction cannot be uniform for all deposit insurers, but will need to be tailored according to their mandate and the legal framework in each jurisdiction.