Estimated sufficiency of the deposit insurance fund

In the year of the report the Agency continued creating a risk management system, in order to forecast the sufficiency of the fund in the forthcomming period.

According to Article 21 of the Law on deposit insurance, the Agency calculated the amount of the fund, sufficient to cover forecasted payouts to depositors in 2007. Based on the Social and Economic Development Forecast of the Russian Federation in 2006 and on the basic 2007 forecast parameters developed by the Economic Development and Trade Ministry of Russia, the Agency calculated the parameters of the deposit insurance system for the end of 2007 proceeding from the scenario of sustainable economic growth and the absence of preconditions for a financial or banking crisis in Russia. To forecast the cash-flow of the fund’s resources the Agency designed and used the Methods of estimating the sufficiency of the mandatory deposit insurance fund based on bank accounting data and macroeconomic and financial statistics.

The forecast of expected cash inflow and statistically expected payments showed the resources of the fund during the year will be sufficient to reimburse all expected depositors’ claims and there is no necessity to engage federal budget appropriations to cover the fund’s deficit in 2007. The Agency’s Board of Directors considered the sufficiency issue on June 27, 2006.

The Agency also quarterly estimated the risks of the deposit insurance system for the next quarter. The Executive Board of the Agency considered the estimates.

The deposit insurance coverage limit of 190 thousand rubles established in 2006 comprised one GDP per capita percent and allowed full protectionof the savings of some 88% of bank depositors. In the period of the report the Agency began calculating the possibility of raising the deposit insurance coverage limit in 2007.