Improving Banking Supervisory Mechanisms
In the OIC Member Countries
57
Table 25: Deposit Insurer Power Index
Source: World Bank, Bank Regulation and Supervision Survey
4.2.7 Selected Responses from 2011 Survey: Comparison of OIC Countries, EU-27 and US
In this section, we present responses to a selected set of questions regarding different aspects
of regulation which might have important implications for regulation and supervision. First
question investigates the types of risks covered as a part of minimum regulatory capital
requirement. The analysis is conducted for three types of risk, credit risk, market risk and
operational risk. In most of OIC countries, credit risk and market risk are covered by the
regulatory minimum capital, however operational risks are covered in relatively lower fraction
of OIC countries, compared to 100% coverage in EU-27 and US. Operational risks will be an
ingredient of Basel III and OIC countries might include them in the definition of minimum
capital to achieve a more sound capital regime.
Figure 37: Regulatory Minimum Capital Requirements
Survey
OIC
Average
OIC-High
Income
Average
OIC-
Upper-
Middle
Income
Average
OIC-
Lower-
Middle
Income
Average
OIC-Low
Income
Average
EU-27
Average
United
States
Deposit Insurer
Power
2000 1,3 1,08 1,67 1,50 1,50 0,7 4
Range 0-4 2003 1,4 1,70 2,03 1,71 1,71 1,1 4
2007 1,5 1,29 1,64 1,62 1,62 1,0 4
2011 1,3 1,72 2,09 1,91 1,91 0,9 4
Funding with
Insured
Deposit
2000 N/A. N/A. N/A. N/A. N/A. N/A. N/A.
(percentage) 2003 13,0 28,99 28,99 26,99 26,99 44,4 38,5
2007 17,7 31,79 35,71 32,77 32,77 36,3 35,1
2011 36,8 31,28 29,02 32,28 32,28 58,0 79
Degree of
Moral Hazard
2000 1,1 1,62 1,60 1,74 1,74 1,5 2
Range 0-3 2003 1,2 1,35 1,29 1,41 1,41 1,8 1
2007 1,6 1,91 1,79 1,97 1,97 1,6 2
2011 1,3 1,50 1,50 1,38 1,38 1,2 2
0%
20%
40%
60%
80%
100%
120%
Which risks are covered by the current regulatory minimum capital
requirements (percentage of yes)
Credit risk Market risk Operational risk