IADI Executive Training Program “By Deposit Insurers for Deposit Insurers” Report Annual Meeting of IADI 15 November 2006

Timing and Site of Program 16 July (Monday) through 19 July, 2007(Thursday). FDIC Training facility in Arlington, Virginia, home of the FDIC’s Corporate University, and an adjacent hotel.

Timing and Site of Program II Participants can combine training with other business such as meetings with International Financial Institutions (IMF, WB) or other U. S. government agencies, e.g., Treasury, State, USAID, etc. Future sessions of the program may be delivered elsewhere based upon experience gained.

Overall Approach Select topics that are unique to deposit insurers that cannot easily be studied elsewhere. Limit the number of topics so that there is ample time for thorough and careful discussion of the issues involved.

Overall Approach II Utilize extensive work already done by IADI to select topics, i.e., “be guided by the Guidance.” Members and participants can and should learn from each other in the training process. A case approach will be utilized, with volunteers preparing and presenting cases.

Overall Approach III The program will be designed to be cost effective reflecting the view that stewardship of deposit insurance agency resources is a high priority.

Topic I Design, Implementation, Organization, Governance, and Continuous Improvement of a Deposit Insurance (DI) Program. Case studies will include the following: –Macroeconomic conditions at the time of establishment. –Financial sectors conditions at the time of establishment.

Topic I (Continued) Design Features: –Membership –Coverage –Funding –Relations with other safety net participants –Depositor reimbursement –Failure resolution

Topic I (Continued) Issues to be discussed: –What would be done differently in light of experience? –What problems that were not anticipated have occurred? –What steps are being taken to deal with problems? –How are relations with other safety net participants?

Volunteers for Topic I Bosnia and Herzegovina (Mr. Peter Nicholl) El Salvador Taiwan Currently exploring the possibility of adding Indonesia

Topic II Claims and recoveries. Case Studies will include the following: –Responsibilities of DI agency in failure resolution. –Does DI agency participate in decision on closure? –Does DI agency act as receiver of failed bank. –Is there a special process for bank failure? –Pre-failure preparation and consultation.

Topic II (Continued) Cases (continued): –What approach was used in resolution, e.g., liquidation, deposit assumption, etc.? –Does the DI agency handle all claims or just claims for insured deposits? –Does the DI agency have responsibility for recovery from the assets of the failed bank?

Topic II (Continued) Case Studies (continued) –Steps in claims process. –Gather data from banks records. –Prepare statements of depositor ownership and rights of offset. –Identify sources of funding for the payment of insured depositors. –Contact depositors/ –Make arrangements for payment.

Topic II (Continued) Recoveries: –Are good assets separated from bad? –What is the environment for disposing of assets, i.e., secondary market, ? –Are there arrangements with an acquirer to share losses on assets? –Are assets to be marketed through private negotiation or auction?

Topic II (continued) Issues to be discussed: –What is the level of co-operation between the DI agency and the bank supervisor and/or central bank? –How much time ahead of the process was available for planning an efficient and orderly process? –How long did it take to pay insured depositors?

Topic II (continued) Issues to be discussed (continued): –What steps would you take the next time based on your experience? –What recommendations would you make regarding changes in legislation, regulation, etc,?

Topic II (continued) Volunteers for case studies: –United States –Korea

Summary IADI Executive Training Program will be delivered in July 2007 at FDIC facilities in DC area. Two topics will be covered in depth. Method will include case studies with ample discussion time. Emphasis will be on learning from cases and discussions, for deposit insurers by deposit insurers.