The Deposit Insurance Corporation’s (DIC) stated Vision is ‘To be a dynamic contributor to the financial sector safety net.1’ Today, along with other safety net participants such as the Central Bank of Trinidad and Tobago, the Trinidad and Tobago Securities and Exchange Commission and the Ministry of Finance, the DIC plays a contributory role to the continued stability of Trinidad and Tobago’s financial system.
Towards a Stable Financial System.
As part of its contribution to the stability of the financial system, the DIC engages with the other safety net participants with the intention of sharing relevant financial sector information and, where necessary, coordinating an approach to any emerging issues and challenges.
A key enabler in the successful achievement of its role has been the DIC’s participation with regional and international counterparts and organisations.
Global Network. Global Standards.
In 2002, the DIC became one of the founding members of the International Association of Deposit Insurers (IADI), which was established as a global standard-setting body for deposit insurance systems. The benefits derived from networking and sharing information with other members, particularly on common problems and issues, cannot be understated.
As a member of the IADI, the DIC has access to shared expertise and information on deposit insurance and bank resolution issues through training, educational programs and conferences. The IADI has formulated research and guidance papers aimed at providing members with information on creating, operating and improving deposit insurance systems.
The IADI currently has 86 members from across the globe. There are eight associates representing other safety net organisations from jurisdictions that have developed or are considering developing a deposit insurance system. Additionally, the IADI has partnered with 16 organisations under a cooperative arrangement in order to pursue and further its objectives.
Systems & Standards
One cannot mention the IADI without referencing its Core Principles for Effective Deposit Insurance Systems, formulated in 2009 and revised in 2014. The Core Principles provide a voluntary framework for effective deposit insurance practices and are part of the Key Standards for Sound Financial Systems of the Financial Stability Board (FSB). They are also used in the Financial Sector Assessment Program (FSAP) reviews conducted by the International Monetary Fund (IMF) and the World Bank.
The DIC has therefore leveraged its membership of the IADI to develop and strengthen its deposit insurance procedures and processes, resulting in institutional strengthening and enhanced technical competence. All of this facilitated the deepening of the engagement with other safety net participants.
Shaping Policies & Decisions
However, membership of an international organisation is not just a matter of seeking to benefit from global standards and expertise.
The DIC has always taken an active role in providing input to the IADI’s research and guidance papers and, until recently (2017 – 2020), played a leading role as a member of the IADI’s Executive Council, while continuing to serve on key technical committees. This role has given the DIC a voice in shaping policy and decision making in an international arena and has served to benefit the Caribbean Region by providing the opportunity to highlight key issues and challenges faced by the regional Deposit Insurers.
The DIC played a leading role as a member of the IADI’s Executive Council, providing input to the IADI’s research and guidance papers.
– IADI
The DIC also chaired the IADI’s Caribbean Regional Committee from 2016 to 2020 and has been involved in providing technical assistance and guidance to the development of new and fledgling Deposit Insurance systems in regional jurisdictions. Additionally, the DIC has engaged with CARICOM on one of its projects associated with developing a deposit insurance model for Caribbean jurisdictions that do not yet have such systems.
References
International Association of Deposit Insurers (IADI)
IADI Core Principles For Effective Deposit Insurance Systems (November 2014
1A framework that includes the functions of prudential regulation, supervision, resolution, lender of last resort and deposit insurance.
