The significant development of financial markets, new financial products, the high level of international interconnection and the key role of this area for the stability of national and global economies have shown the need for deposit guarantee that will - in the event of problems - prevent runs on banks, i.e. mass deposit withdrawals. Such situations lead in most cases not only to a deterioration of the financial situation of the financial institutions in question, but they could also cause a run and the subsequent collapse of the whole financial sector.
Besides the European Forum of Deposit Insurers, described in the European Union Framework in more detail, the Guarantee System is a member of the International Association of Deposit Insurers (IADI). According to data from this association, as of 1 January 2014, 113 countries have instituted some form of explicit deposit insurance, up from 12 in 1974, while another 40 jurisdictions are studying or considering the implementation of an explicit deposit insurance system.
The IADI is a non-profit organization founded in May 2002 under Swiss Law. Its registered office is at the Bank for International Settlements in Basel, Switzerland. The genesis of the IADI was the Working Group on Deposit Insurance established by the Financial Stability Forum (FSF) in cooperation with World Bank (1999 – 2001). Currently, the IADI has 83 Members, 8 Associates, and 14 Partners, such as the World Bank and the International Monetary Fund. The former Deposit Insurance Fund was one of the 25 founding members. The IADI is governed by a 25-member Executive Council, headed by a president.
The main objectives of the IADI are to contribute to the stability of financial markets by promoting international cooperation in the field of deposit insurance (including the mutual exchange of experience) and by providing guidance for establishing new, and enhancing existing, deposit insurance systems in order to ensure their effective operation.