OREANDA-NEWS. General Director of the Deposit Insurance Agency Yury Isaev took part in the International conference of deposit insurers that took place in Seoul, Korea, on May 15-16, 2013. The conference was organized by the Asia-Pacific Regional Committee of the International Association of Deposit Insurers (IADI) and the Korea Deposit Insurance Corporation.

Yury Isaev delivered the presentation “Deposit insurance: main achievements and challenges for Russia”.

"About five and a half years have passed since the start of the recent financial crisis. In many aspects the situation has changed to the better. At the same time we see that the repercussions of the crisis are far from being overcome", pointed out Mr. Isaev.

In his view a serious problem that threatens the global stability is the sovereign debt burden, especially in Southern Europe, that limits abilities of these countries to support their economies and banking sectors. Obvious examples of this problem were seen recently in Cyprus and Slovenia, and before this – in Greece, Spain, Italy and Ireland.

A number of deficiencies in financial regulation still exist. Among them: regulation and supervision of financial conglomerates, incentives and remuneration of bankers. Serious concerns remain in relation to shadow banking and systemically important financial institutions – SIFIs, both banking and non-banking.

“All challenges, if not properly addressed, can threaten sustainability of financial systems. Exactly because of this during the crisis the role and intensified efforts of international financial institutions substantially increased. In particular, G20 and the Financial Stability Board as well as other financial standard setting bodies such as the Basel Committee on Banking Supervision and IADI became extremely important global players that contributed to the development of a number of new international approaches and standards that are of great relevance to the deposit insurers”, stressed the Agency’s General Director.

He pointed out that Russia this year chairs the G20. “Russia has proposed its comprehensive agenda, and financial regulation reform is one of the three top priorities. For the September G20 summit which will take place in St. Petersburg, the FSB is to prepare a report on the progress made towards ending “too big to fail”. It should ensure further development and monitoring of the "too-big-to-fail" regulatory framework and the implementation of identification principles and prudential measures relating to domestic systemically important banks. We believe that these initiatives are extremely important for all deposit insurers, not only from the G20 member countries”, said Yury Isaev.

He also stressed that the Agency was constantly monitoring the risks that could endanger sustainability of the deposit insurance system. “I will point out just some of them: the rapid growth of deposits in banks, the interest rate race, deposit insurance fraud cases that are becoming widespread, etc.”.

Mr. Isaev shared his opinion that it is very important for deposit insurers to exchange experiences and implement best practices of each other. He said: “It is very important for all of us to ensure that the International Association of Deposit Insurers will continue to play a meaningful role in the global financial safety net”.