Navigating Policy Challenges to Sustain Stability in an Uncertain and Fragmented World
Opening Remarks by Mr Alejandro López, President of IADI and Chair of the Executive Council, during the IADI 2025 Annual Conference Hosted by the Fundo de Garantía de Depósitos (FGD) of Portugal
Bom Dia – Good morning everybody – It’s a pleasure to be here at the IADI 2025 Annual Conference in the beautiful and historic city of Lisbon. I am delighted to see so many of our Members, Associates and Partners gathered here today. On behalf of the International Association of Deposit Insurers, I extend my warmest greetings to each of you—our speakers, moderators, panelists, and participants from around the world.
Let me start by expressing sincere gratitude to our host, the Fundo de Garantia de Depósitos of Portugal, for the outstanding organisation of this conference and for their generous hospitality.
Hosting the 24th IADI Annual General Meeting is a considerable achievement, particularly as our Association has grown to 107 members representing 115 jurisdictions. The professionalism and dedication of our Portuguese colleagues have been truly impressive.
Obrigado – thank you, Luís Máximo dos Santos, and your entire team, for making this week possible.
The Context We Face
This year’s theme – “Navigating Policy Challenges to Sustain Stability in an Uncertain and Fragmented World” – captures the realities confronting deposit insurers and all financial safety-net participants today.
We operate amid profound change: geopolitical tensions are straining international cooperation; economic fragmentation is producing divergent regulatory paths; and rapid technological advancement is transforming the delivery and consumption of financial services. These forces create uncertainty, yet they also present opportunities.
As deposit insurers, we remain guardians of public confidence and financial stability. To fulfil that mandate in the current environment, we must reflect rigorously, collaborate extensively, and adapt purposefully.
This conference offers precisely the platform we need: to examine emerging challenges, draw on expert insights, and exchange experiences across jurisdictions. I particularly thank José Maria Brandão de Brito, Portugal’s Deputy Minister of Finance and Secretary of State for the Budget, Travis Hill, Acting Chairman of the FDIC, and Marina Moretti, Deputy Director of the IMF’s Monetary and Capital Markets Department, for joining us today and enriching our discussions.
Three Key Areas for Our Discussions
I would like to highlight three interconnected priorities that will shape our work in the coming days: deposit insurance coverage models, financial safety-net collaboration, and digital innovation.
1. Coverage Models: Balancing Protection, Stability, and Incentives
The banking stresses of 2023 underscored the risks posed by large volumes of uninsured deposits. The speed of outflows – accelerated by digital channels and social media – showed how quickly confidence can evaporate when significant deposit balances lack explicit protection. These events have rightly prompted global re-examination of whether current coverage levels and designs remain adequate.
In a number of jurisdictions, this has led to discussions on whether existing coverage levels remain appropriate or need to be increased. In yet other jurisdictions, the concepts of differential, or targeted, coverage models for deposit insurance have received increased attention.
Differential coverage models can offer higher or unlimited coverage for operational business accounts or public-purpose balances while maintaining limited coverage for others.
Such designs can reduce contagion risk from uninsured runs, provide resolution authorities greater flexibility, and close the most dangerous protection gaps. However, they also carry material drawbacks that require careful management:
- Heightened moral hazard and reduced market discipline where protection is expanded;
- Significantly larger contingent liabilities for deposit insurance funds, necessitating robust, credible funding (whether ex-ante, ex-post, or hybrid) and possibly risk-adjusted premiums that reflect the additional coverage provided.
Crucially, no coverage model can substitute for strong supervision or credible resolution frameworks. Coverage adjustments must complement – never replace – these foundational elements.
The recently revised IADI Core Principles do not prescribe any single model; they recognise that design must fit jurisdictional circumstances. They do, however, set clear preconditions for differential coverage approaches: transparency and simplicity for depositors, and operational feasibility in identifying eligible deposits
As we debate these issues, caution and evidence must guide us. Our twin objectives – protecting depositors and contributing to stability – remain non-negotiable.
2. Financial Safety-Net Collaboration: Stronger Together
The second topic I would like to briefly address is financial safety net collaboration.
The challenges we face as deposit insurers are increasingly interconnected. The growing complexity of financial systems demand that we work together—not just domestically, but also internationally.
The revised IADI Core Principles place significant emphasis on the value of cooperation. They highlight the importance of collaboration among all financial safety net participants, including deposit insurers, supervisors, resolution authorities and central banks. Many of these key stakeholders are present here today, and I want to take this opportunity to acknowledge the critical role you play in ensuring financial stability.
Domestically, effective collaboration among safety net participants is essential for several reasons. It builds the trust and understanding necessary for rapid coordination during crises, when time is of the essence. It enables appropriate information sharing that allows each authority to fulfil its mandate more effectively. It helps align crisis preparedness and response strategies, reducing the risk of gaps or contradictions. And it ensures that the respective roles and responsibilities of different authorities are clearly understood by all parties.
Internationally, cooperation is equally vital. Cross-border banking operations mean that problems in one jurisdiction can quickly affect others. Solutions we develop in one country can provide valuable lessons for others facing similar challenges. As we navigate this complex landscape, we must strengthen our networks, share knowledge actively, and work together to address common challenges.
This is precisely where IADI’s role as a global standard-setter and convener becomes invaluable. Through its knowledge-sharing platforms and events like this conference, IADI unites the global deposit insurance community, enabling us to learn from each other’s experiences.
When we work together – domestically and globally – we are far stronger and far better prepared.
3. Digital Innovation: Opportunity and Challenge
The rapid digitalisation of finance is both a disruptor and an enabler. On one hand, it offers powerful new tools to enhance operational efficiency, improve customer service, and strengthen financial inclusion—benefits that extend to both financial institutions and deposit insurers. On the other hand, it introduces significant new risks that we must understand and address: the growth of less-regulated and supervised actors operating outside traditional banking; cybersecurity threats that can compromise data and operations; the emergence of digital currencies and stablecoins with implications for deposit behaviour and financial stability; and the potential for technology-amplified bank runs that unfold at digital speed.
As deposit insurers, we must remain at the forefront of understanding and addressing these changes. We cannot afford to be passive observers of innovation—we must be active participants in shaping how it affects our systems and the depositors we protect.
IADI is actively contributing to this effort through our ongoing work on the “Report on the Impact of Financial Innovation and Digitalisation on Deposit Insurance Systems.” This report, which was discussed yesterday by our Executive Council, provides a comprehensive assessment of the state of play regarding key digital innovations in the financial system. It identifies both risks and opportunities for deposit insurance systems, analysing how developments like artificial intelligence in banking operations, distributed ledger technology, open banking frameworks, and digital currencies may affect deposit insurance m operations.
It is important to note that this is an iterative process. Financial innovation is not static—it evolves rapidly, often in ways that are difficult to predict. Our understanding of its implications must therefore evolve continuously as well.
IADI will continue to work closely with experts from academia and industry, with international stakeholders, and of course with our members, to deepen our knowledge and develop practical solutions that serve deposit insurers worldwide.
Conclusion: Building Resilience for an Uncertain Future
Ladies and gentlemen, to return to the title of today’s conference: yes, we live in an uncertain and fragmented world. The challenges we face are significant and multifaceted. But so too are the opportunities before us.
By building resilience in our deposit insurance systems, by fostering genuine collaboration across institutions and borders, and by thoughtfully embracing innovation while managing its risks, we can successfully navigate this complex landscape.
We can ensure that deposit insurance remains what it has always been meant to be: a pillar of trust and stability in the financial system, protecting depositors and contributing to the confidence upon which economic prosperity depends.
The discussions we will have over the coming days will help chart the path forward. I encourage you all to engage actively, to share your experiences candidly, and to learn from one another.
I wish you a productive and inspiring conference.
Thank you – Obrigado.