6 FDIC Part 370 Calculations
Most countries have implemented deposit insurance schemes to safeguard the interest of the depositors if bankruptcy of the depository institution. With the introduction of regulations such as Basel III, the insured part of a deposit is must be identified and treated appropriately for liquidity risk purposes. Recent regulations, such as FDIC 370, mandating banks to identify and report the insurance coverage at an account level for various ownership rights and capacities to ensure that the insurer pays out the amount due to depositors promptly.
OFS Deposit Insurance Calculations for Liquidity Risk Management covers deposit insurance calculations for liquidity coverage ratio and other calculations required for Liquidity Risk Management. The application identifies insurance eligible accounts under a particular deposit insurance scheme. The right and capacity under which these accounts are held and the insurance limit provided by the country specific insurer for each account. It allocates the insurance limit to the account level based on the ownership right and capacity and identifies the insured and uninsured portion of the account. Specifically, this release addresses the FDIC 370 guidelines, which will be followed by coverage for other countries.
For brokered deposits, the bank has the option to provide data in a reduced format as per Alternative Recordkeeping requirements. For such accounts, the ORC Classification is a download for the Application. The Insurance calculation and Allocation process for these accounts are done along with the bank’s own accounts and is done in the same manner.