Deposit Insurance Fund in the role of a bank resolution process financier
Deposit Insurance Fund in the role of a bank resolution process financier

Summary/Abstract: The primary task of the Deposit Insurance Fund (DIF) is to provide for protection of insured deposits in banks and by that contribute to maintaining the financial stability. The DIF can perform its task through the role of the payer of the insured deposits in the event of bank liquidation or bankruptcy, which is its primary role, but also through financing the bank resolution process, which we can be considered to be its complementary role. Bearing in mind that the need for bank resolution is more related to large, systemically significant banks, and by its nature DIF is not intended to solve systemic crises, therefore we call the role of the financier of the bank resolution process an additional role of the DIF. In order to preserve the basic role of DIF in the processes of financing bank resolution, it is essential to establish safeguard mechanisms for the DIF in these processes. Adequate application of safeguards allows the DIF to further contribute to financial stability by financing the bank resolution process while maintaining its core role.

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