In an effort to promote depositor protection on a broader level, the Philippine Deposit Insurance Corporation (PDIC) is reaching out to its global peers for collaborative efforts geared towards enhancing deposit insurance systems worldwide, and bringing it to the public consciousness.
These collaborative efforts are directed towards institutional partnerships among deposit insurance agencies; participation in the development of critical research and guidance papers to help policymakers enhance the operations of deposit insurers; and the promotion of greater deposit insurance awareness and depositor welfare through the commemoration of the International Week of Deposit Insurance.
Thus this week, PDIC is joining the International Association of Deposit Insurers (IADI) in commemorating the second year of the International Week of Deposit Insurance on May 7-13.
IADI is an international organization composed of 47 deposit insurance agencies and more than 10 partner multilateral agencies and central banks worldwide. It aims to contribute to financial system stability by promoting international cooperation, enhancing the understanding of deposit insurance issues. It is headquartered in Basel, Switzerland.
Along the line of collaborative activities, PDIC, as a founding member of the IADI, has recently strengthened institutional ties with two international deposit insurance agencies, the Federal Deposit Insurance Corporation (FDIC) of the United States and the Deposit Insurance Corporation of Japan (DICJ).
Last April 25-26, Mr. Donald Inscoe of the FDIC made a fruitful institutional visit to the PDIC to exchange information and insights about deposit insurance operations in the Philippines and the United States as well as explore possible areas of cooperation between the two institutions.
Mr. Inscoe is the Deputy Director for Financial Risk Management and Research of the FDIC.
The FDIC executive lectured intensively on key operational aspects namely, risk-based premium system, deposit insurance fund levels, and the salient features of the amended Federal Deposit Insurance Corporation Act of 1991. On the other hand, PDIC senior executives also briefed the visitor on the present state of the Philippine banking system and operational highlights of the Corporation.
PDIC Acting President Michael A. Osmeña led the PDIC Executive Committee in exploratory talks with Inscoe on possible areas of cooperation.
In the same vein, earlier this year, PDIC signed a bilateral agreement with the Deposit Insurance Corporation of Japan for information exchange and technical cooperation for the promotion of financial stability in both countries. It was PDIC's first formal agreement with a foreign deposit insurance counterpart.
The agreement was signed during the landmark visit to the PDIC of DICJ Governor Shunichi Nagata last January.
In the area of policy development for the enhancement of deposit insurance systems worldwide, PDIC through its participation in the IADI Research and Guidance Committee is actively contributing to the existing development of important guidance on key operational areas namely: deposit insurance claims and asset recoveries, funding deposit insurance fund, public awareness, and determining the sufficiency of the deposit insurance fund. These research initiatives will serve as sources of guidance for the efficient and effective operations of deposit insurers worldwide.
There are more than 90 deposit insurance systems in place worldwide and more than 20 are being developed in several countries, which is reflective of the importance given to deposit insurance as an important fiber of the financial safety net.
All over the world, deposit insurance helps maintain public confidence in the financial system thereby increasing savings rate and helping foster financial stability.