Upon completion of this program, participants will be able to:

• Explain the rationale, core functions, and moral hazard implications of Deposit Insurance Schemes (DIS).
• Analyze the key design parameters of a DIS (e.g., coverage level, membership, perimeter).
• Evaluate the trade-offs between ex-ante (pre-funded) and ex-post (post-funded) funding models.
• Describe the procedures for rapid payout and the mechanisms for reimbursement.
• Understand the critical interface between the DIS, the Resolution Authority, and the central bank (LOLR).
• Assess the supervisory framework for monitoring risk and calculating risk-based contributions.
• Examine the role of the DIS in bank resolution processes (e.g., bridge banks, purchase and assumption).
• Formulate policy recommendations for optimizing a national DIS based on IADI Core Principles.

• Deposit Insurance Agency Staff (Policy, Risk, Operations)
• Central Bank Policy and Financial Stability Analysts
• Bank Supervisors and Regulatory Authority Personnel
• Commercial Bank Treasury and Regulatory Compliance Officers
• Government Treasury and Finance Officials
• Legal and Audit Professionals specializing in Banking Law

Case studies on historical bank runs and DIS responses, Group project on designing a risk-based premium system, Simulation of a rapid payout procedure, Policy debates on optimal coverage levels, Discussions on DIS involvement in bank resolution tools, Analysis of IADI Core Principles compliance.

Unit 1: DIS Rationale and Design Principles

• The core functions: depositor protection, financial stability, and contributing to bank resolution.
• Mitigating bank runs and the role of the DIS in public confidence.
• The inherent **moral hazard** risk and mitigation strategies (e.g., risk-based premiums).
• Global and international standards (e.g., IADI Core Principles, FSB recommendations).

• Determining the optimal coverage level: balancing protection and cost/moral hazard.
• Defining the membership perimeter (e.g., banks, credit unions) and the types of deposits covered.
• Addressing the treatment of large, foreign, and interbank deposits.
• Public awareness and communication strategies for the DIS.

Unit 2: Funding and Supervision

• Analysis of ex-ante (pre-funded) vs. ex-post (post-funded) DIS funding models.
• Setting the target fund size and methodologies for fund build-up.
• Designing risk-based premium systems and calculating contributions.
• Investment management and governance of the DIS fund assets.

• The role of the DIS in obtaining information and monitoring insured institutions.
• Coordination and information sharing with the microprudential supervisor.
• Early intervention and preventative measures the DIS may employ.
• Legal powers of the DIS to compel information or remediation.

Unit 3: DIS and Bank Resolution

• Developing the operational capacity for **rapid payout** (e.g., 7-day target).
• Information requirements and technology for accurately identifying and calculating insured deposits.
• Communication strategy during a bank failure to manage depositor confidence.
• Mechanisms for the transfer or sale of deposits to a viable institution.

• The DIS as a contributor to the financing of bank resolution (e.g., bridge bank capitalization).
• The role of the DIS in **Purchase and Assumption (P&A)** transactions.
• The concept of the **Least Cost Test** and its application in resolution decisions.
• The DIS role in depositor preference and the hierarchy of claims in liquidation.

Unit 4: Global Trends and Challenges

• Challenges in protecting deposits in institutions with cross-border branches and subsidiaries.
• Home-host country coordination and the issue of multiple insurance coverage.
• Efforts towards harmonization and cooperation in regional deposit protection (e.g., EU).
• The role of the DIS in systemic crises and its coordination with LOLR.