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EVENT-DEPOSIT INSURANCE NEWS |
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Domestic News |
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DEPOSIT WITH FINANCIAL INSTITUTIONS
A SPECIFIC OBJECT FOR INSURANCE
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Deposit insurance (DI) was first mentioned in the first decades of the twentieth century and marked by the birth of Federal Deposit Insurance Corporation (FDIC) – the world’s first organization of this kind - in the U.S. in 1933. At present, alarming problems and bad consequences to the socioeconomic life keep making their appearance when runs on banks take place: in the last decade, the Argentine Government had to resigned because of a bank run; the English Government in late 2007 had to nationalize the Northern Rock Bank suffering a loss of some EUR50 billion; and Bear Stearns – one of the biggest American banks was declared bankrupt in 2007. Preventing and handling risks involving bank deposits are still topical today.
Deposit insurance is a risk-preventing measure taken by many governments to protect deposits in case of bank insolvency. Most DI systems are established by governments or some department of the central bank. This makes the system a safe institution that can win confidence and trust from depositors in the most difficult times. It makes depositors feel sure when depositing their money with banking institutions. Besides protecting depositors, the DI system also aims at preventing panic in the banking system, ensuring safety for the banking –financial sector, and thereby stabilizing the economy.
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“Deposit Insurance of Vietnam (DIV)’s Receipt and Settlement project” – Be aware of possible risks
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Northern Rock bank was established in 1997 when it was floated on the London Stock Exchange. During its century of operations, Northern Rock has established a rooted foothold in the UK market and, at one point, was the fifth largest bank in the United Kingdom. However, due to the recent credit squeeze in the United States, within 7 days, an estimated 30,000 persons had withdrawn their money. Realizing that the bank was on the brink of collapse, executives invited Sir Bobby Robson – ex-coach of UK national football team to speak on national TV. Robson defended the bank, saying it was not in danger and he called for customers’ to help it recover. Robson’s is a well-known and trusted public figure, but his attempts were to no avail. Customers continued to withdraw and soon after, “Northern Rock” collapsed.
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Workshop explains new law on deposit insurance
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Hà Nội – The draft law on deposit insurance is likely to be completed by the end of this year.
This is according to the deputy director of Deposit insurance of Việt Nam, Nguyễn Như Minh. He was speaking at a workshop on bank resolution procedures and about lessons learned in Japan.
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International News |
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IADI’s News Letter Vol. 6 Issue 1 on 30 April 2007
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Highlights in this Issue: (1) International Deposit Insurance Week – 6-13 May 2007; (2) “Save the Date” for the IADI Executives Training Program Border Issues; (3) Remarks of the Chair at the Fifth Asia Regional Committee Meeting in Hanoi, Vietnam
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IADI’s News Letter Vol. 5 Issue 7 on 22 March 2007
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Highlights in this Issue: (1) IADI Participants: Save the Date for the IADI Symposium on Cross Border Issues; (2) New Chair of the IADI Training and Conference Committee appointed; (3) Upcoming Fifth Asia Regional Committee Meeting in Hanoi, Vietnam; (4) Member Profile of Deposit Insurance Vietnam"
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