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Kevin Chew Senior Manager, MDIC Tanzania, 24 July 2010 PowerPoint PPT Presentation


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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.

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Kevin Chew Senior Manager, MDIC Tanzania, 24 July 2010

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Kevin chew senior manager mdic tanzania 24 july 2010

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


Four common essential elements of effective deposit insurance systems

Four Common Essential Elements of Effective Deposit Insurance Systems


Clear and precise mandate 1

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


Clear and precise mandate 2

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.


  • Two aspects of operational independence

    Two Aspects of Operational Independence


    Mdic s governance structure fosters independence

    MDIC’s Governance Structure Fosters Independence


    Benefits of being operationally independent

    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


    Mdic governance features that promotes accountability

    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


    Transparency 1

    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.


    Transparency 2

    Transparency (2)


    Mdic channels of reporting

    MDIC - Channels of Reporting


    Conclusion

    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.


    Kevin chew senior manager mdic tanzania 24 july 2010

    Thank You


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