1 / 13

Kevin Chew Senior Manager, MDIC Tanzania, 24 July 2010

The IADI-Africa Region Annual Conference The Benefits of Deposit Insurance in Africa Design Features of Effective Deposit Insurance System. Kevin Chew Senior Manager, MDIC Tanzania, 24 July 2010 . Four Common Essential Elements of Effective Deposit Insurance Systems.

sara-morrison
Download Presentation

Kevin Chew Senior Manager, MDIC Tanzania, 24 July 2010

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The IADI-Africa Region Annual ConferenceThe Benefits of Deposit Insurance in AfricaDesign Features of Effective Deposit Insurance System Kevin Chew Senior Manager, MDIC Tanzania, 24 July 2010

  2. Four Common Essential Elements of Effective Deposit Insurance Systems

  3. Clear and Precise Mandate (1) • Overlaps in roles and responsibilities. • Without clarity: • Unproductive overlaps/duplication of roles/working at cross purposes (undermines confidence) • With clear differentiation: • Financial system as a whole is stable • Policy decisions can be made quickly

  4. Clear and Precise Mandate (2) • Rules for cooperation provided for by laws • Malaysia – enables MDIC and BNM to enter into a SAA • The SAA: • Formalises coordination of actions and information sharing • Forms basis for clear division of labour and areas for coordination • Becomes important if DIs have powers to intervene and resolve troubled banks.

  5. Two Aspects of Operational Independence

  6. MDIC’s Governance Structure Fosters Independence

  7. Benefits of Being Operationally Independent More credible in eyes of general public Seen as good practice Minimises likelihood of regulatory forbearance Minimises likelihood of regulatory capture Gives policy decisions greater legitimacy Can undertake financial stability functions quickly that allow for more rapid and effective response to crisis situation

  8. MDIC Governance Features that Promotes Accountability • Separation of Board, CEO and Management • Strategic Planning – Operationalise Management’s Accountability to Board • Board Governance Policy – 15 standards that deals with Board’s roles and responsibilities • Strong and independent internal audit function • Enterprise risk management function • Checks and balances on CEO by Board • MDIC required to have annual financial statements verified by independent external auditor and submitted to Parliament

  9. Transparency (1) Refers to process of informing the public on how the organisation is being governed and managed, what it planned to achieve, and whether goals were achieved. Enable interested parties to assess performance and determine whether we achieved our core objective.

  10. Transparency (2)

  11. MDIC - Channels of Reporting

  12. Conclusion 4 common elements - clear mandate. independence, transparency and accountability At MDIC, these elements underpin MDIC progress in gaining public confidence. Official endorsement of its ability and effectiveness, MDIC mandate extended to cover insurance industry.

  13. Thank You

More Related