1. Investment Policies www.iadi.org J.R. LaBrosse Director, International Affairs Canada Deposit Insurance Corporation Presentation to the IADI/EBRD Seminar on Deposit Insurance December 9, 2003

2. www.iadi.org Purpose of this Presentation Factors to consider in Devising Investment Policies for Deposit Insurers

3. www.iadi.org Responsibilities of Management Setting out a policy Determining risk tolerances

4. www.iadi.org Governance framework Processes Will the function be outsourced? Decision making Reporting

5. www.iadi.org CDIC’s experience with risk tolerances

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8. Policy Considerations Determining the purpose of the portfolio will lead to an understanding of the risk tolerance that can be accepted by management

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10. Determining risk tolerances of the investment portfolio

11. www.iadi.org Risk tolerance conclusions

12. www.iadi.org Evolution of CDIC’s investment policy

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14. Investment policy limitations: Credit risk Counterparty risk Maturity Profile Liquidity Risk by Issuer, and Portfolio Liquidity Risk

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16. Investment Policies www.iadi.org Presentation to the IADI/EBRD Seminar on Deposit Insurance December 9, 2003 Presentation by: J.R. LaBrosse Canada Deposit Insurance Corporation