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How Deposit Insurers Account for Inflation: Practices and Existing Guidance

Author

Listed:
  • Bert Van Roosebeke

    (International Association of Deposit Insurers)

  • Ryan Defina

    (International Association of Deposit Insurers)

Abstract
IADI Guidance in place recommends a review of deposit insurance coverage levels more frequently than every five years if consumer price inflation is high. This review may not necessarily lead to a change of coverage levels. Although data availability on this topic is very limited, we find: On a self-reported basis and irrespective of inflation, only half of deposit insurers “periodically†review the coverage level. Although this share has been growing over the past decade, evidence from a sub-sample suggests that irrespective of inflation, periodic review of coverage levels by deposit insurers may regularly take place at intervals exceeding five years. Linking data on coverage review to historical inflation figures on an individual jurisdictional level, we found no substantial evidence that high inflation correlates with more regular periodic review of coverage levels. As to changes of coverage levels – which are observable, in contrast to reviews – we find some early evidence to suggest that coverage levels are adjusted more frequently in jurisdictions with higher levels of inflation.

Suggested Citation

  • Bert Van Roosebeke & Ryan Defina, 2022. "How Deposit Insurers Account for Inflation: Practices and Existing Guidance," IADI Policy Briefs 7, International Association of Deposit Insurers.
    • Handle: RePEc:awl:polbri:7
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    References listed on IDEAS

    as
    1. Ms. G. G. Garcia, 2000. "Deposit Insurance: Actual and Good Practices," IMF Occasional Papers 2000/001, International Monetary Fund.
    2. Bert Van Roosebeke & Ryan Defina, 2022. "How Inflation Impacts Deposit Insurance: Real Coverage and Coverage Ratio," IADI Policy Briefs 6, International Association of Deposit Insurers.
    3. International Association of Deposit Insurers, 2016. "IADI Handbook for the Assessment of Compliance with the Core Principles for Effective Deposit Insurance Systems," IADI Standards 16-03, International Association of Deposit Insurers.
    4. International Association of Deposit Insurers, 2021. "Deposit Insurance Coverage Level and Scope," IADI Research Papers 21-12, International Association of Deposit Insurers.
    5. International Association of Deposit Insurers, 2013. "Enhanced Guidance for Effective Deposit Insurance Systems: Deposit Insurance Coverage," IADI Guidance Papers 13-03, International Association of Deposit Insurers.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Bert Van Roosebeke & Ryan Defina, 2023. "Deposit Insurance in 2023: Global Trends and Key Issues," IADI Research Papers 23-02, International Association of Deposit Insurers.

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    More about this item

    Keywords

    deposit insurance; bank resolution;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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