Funding mechanisms of deposit insurance systems in the Asia-Pacific region

An effective funding mechanism is an important component of a deposit insurer's financial stability toolkit. The 2008 global financial crisis has clearly shown that deposit insurers without the basic funding elements in place have found it challenging to maintain public confidence, particularly during a systemic crisis.

This paper is based on the results of a study, entitled "Sources of Liquidity for Deposit Insurance Funds," initiated by the Research Subcommittee of the Asia-Pacific Regional Committee (APRC)1 of the International Association of Deposit Insurers (IADI), and organised by the Central Deposit Insurance Corporation (CDIC), Taiwan in 2005. It incorporates updates following the 2008 global financial crisis and changes made by Asia-Pacific deposit insurance systems from 2005 to 2011.

The paper offers a comparative analysis of deposit insurance systems in 16 jurisdictions of the APRC as of July 31, 2011. It is hoped that this analysis will enhance understanding of the salient funding features and mechanisms of deposit insurers within the APRC, and provide useful information for future enhancements of these key funding elements.