Optimized Funding

Djurdjica Ognjenovic

Chapter 5 in Deposit Insurance Schemes, 2017, pp 183-208 from Palgrave Macmillan

Abstract: Abstract Optimized funding enables deposit insurers to establish an adequately funded ex ante DIF over a medium and longer time frame using regular adjustment of target funding in accordance to the DIS’s risk exposure and thus regular adjustment of the DIS funding to its needs. Deposit insurers use financial planning, target funding and risk assessment in iterations of a comprehensive financial planning cycle to ensure optimized funding. This chapter explains optimized funding and the use of established target funding for the purpose of assessing the sufficiency of DIFs. It explores cases when the DIS faces liquidity and solvency issues due to the DIF’s inadequacy. It explains how to assess the sufficiency of funding for restoring liquidity and solvency and build long-term DIS credibility.

Keywords: Optimized funding; Target fund size revision; Liquidity gap; Solvency gap; Extraordinary funding (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-51143-6_5

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DOI: 10.1007/978-3-319-51143-6_5

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