Supporting deposit insurance agencies

Ever since the crisis started in 2008-09, the EBRD has been on the frontline, seeking ways in which to strengthen financial institutions and the wider economy in our region. A concrete response is our activity to support local deposit insurance agencies.

If a bank fails, it is the deposit insurance agency that would compensate depositors. In addition, in recent years these agencies have taken a growing role in bank restructuring. They are therefore vital for the stability of the financial sector and to prevent bank runs and panic in the market.

The EBRD’s standby emergency credit lines help these agencies achieve a comfortable funding level in a reasonable time frame, providing a bridge in the event of a crisis.

Donors including Luxembourg, and the Early Transition Countries Fund generously provided funding for these projects in Albania, Kosovo, Kyrgyz Republic, Mongolia and Tajikistan, with the most recent launched in Serbia during 2015.

Assistance ranges from developing a sound legal framework to providing managerial support, and setting up agencies and their IT infrastructure for automated emergency pay-outs. In this way, the support introduces best practices and improves corporate governance.