Deposit Insurance Premium Research Articles

The valuation of deposit insurance allowing for the interest rate spread and early-bankruptcy risk

Our proposed model allows for inclusion of the interest rate spread (defined as the difference between the lending rate and the borrowing rate) and the risk of a bank’s early bankruptcy in the derivation of a closed-form pricing formula for calculating deposit insurance premiums. This is important because, in practice, these two factors significantly influence the expected value of a bank’s assets. Also, we use a method that considers the possibility of early bankruptcy to derive new formulas for calibrating the necessary parameters. Data from Taiwanese banks are used to illustrate the application of our model. Our empirical results show that the spread of the interest rate is negatively correlated with the premium. This result is consistent with our theoretical inferences. Moreover, premiums associated with a risk of early bankruptcy are always higher than premiums not associated with such a risk. Using the example of Taiwanese banks, we show that the traditional model underprices the premium by 20.81% if it does not consider the risk of early bankruptcy.

Bank Size and Financial Risk Exposure on Financial Performance of Commercial Banks in Kenya

The performance of banks in Kenya has become a major concern for economics and policy makers due to the role of banks remaining central in financing economic activities. The study sought to establish the effect of bank size and financial risk exposure on financial performance of commercial banks in Kenya. The descriptive research design and a positivist approach were adopted. The Berger and Hannan approach was used to establish the relationship between bank size, financial risk exposure and the moderating effect of macroeconomic variable on the financial performance of commercial banks in Kenya. Various diagnostic tests were carried out and the study data structure was panel hence Stata was employed to determine the relationship between the variables. In conclusion, banks need to grow bank sizes where they enjoy both economies of scale and scope. The Kenyan Treasury should design policies that would increase the capital size, liquidity requirements and deposit insurance premiums; this may assist in enlarging the size of banks to a level where they are fairly equal with none having relative market power to drive the market. Areas of further research may include but not limited to considering other variables besides the financial risk exposure and bank size in determining their effect on the financial performance of commercial banks in Kenya. The research may as well be done in the East African or African context. The further studies should seek to leverage on mixed research approaches that utilize both quantitative and qualitative research.

Fair premium rate of the deposit insurance system based on banks’ creditworthiness

PurposeDeposit insurance is a key element in modern banking, as it guarantees the financial safety of deposits at depository financial institutions. It is necessary to have at least a dual fair premium rate system based on creditworthiness of financial institutions, as considering singular premium system for all banks will have moral hazard. This paper aims to develop theoretical and empirical model for calculating dual fair premium rates.Design/methodology/approachThe definition of a fair premium rate in this paper is a rate that covers the operational expenditures of the deposit insuring organization, provides it with sufficient funds to enable it to pay a certain percentage share of deposit amounts to depositors in case of bank default and provides it with sufficient funds as precautionary reserves. To identify and classify healthier and more stable banks, the authors use credit rating methods that use two major dimensional reduction techniques. For forecasting nonperforming loans (NPLs), the authors develop a model that can capture both macro shocks and idiosyncratic shocks to financial institutions in a vector error correction model.FindingsThe response of NPLs/loans to macro shocks and idiosyncratic innovations shows that using a model with macro variables only is insufficient, as it is possible that under favorable economic conditions, some banks show negative performance due to bank level reasons such as mismanagement or vice versa. The final results show that deposit insurance premium rate needs to be vary based on banks’ creditworthiness.Originality/valueThe results provide interesting insight for financial authorities to set fair deposit insurance premium rate. A high premium rate reduces the capital adequacy of individual financial institutions, which endangers the stability of the financial system; a low premium rate will reduce the security of the financial system.

How Does Information Disclosure Affect Bank Systemic Risk in the Presence of a Deposit Insurance System?

ABSTRACT This article establishes a dynamic game with incomplete information to theoretically analyze the influence mechanism of information disclosure on systemic risk in the presence of a deposit insurance system. To verify the mechanism, we use panel data on 247 global banks in 41 countries during the period 2006 to 2015 in an empirical analysis. Our article finds that a high degree of information disclosure can reduce deposit insurance premiums and weaken the negative incentive from a bailout by regulatory authorities. Moreover, the effect of deposit insurance on financial stability is not apparent, but the synergistic effect of deposit insurance and information disclosure reduces bank systemic risk. Furthermore, different deposit insurance designs affect bank behavior, so it is crucial for bank supervisors to create proper deposit insurance systems, which are helpful in strengthening market discipline and preventing moral hazard thus contributing to a stable financial environment. Therefore, under the deposit insurance system, regulatory authorities should strive to improve the standard of information disclosure to ensure systemic stability.

Political connections, government capital injection, and deposit insurance premium

PurposeThe purpose of this paper is to develop a capped barrier option framework to consider the politically preferential treatment for bank loans incentivized by government capital injections and calculate loan-risk sensitive insurance premiums.Design/methodology/approachThis paper takes a capped barrier option approach to the market valuation of the equity of the bank and the liability of the deposit insurer. The cap demonstrates the dynamics of a politically connected borrowing firm’s asset and highlights the truncated nature of loan payoffs. The barrier addresses that default can occur at any time before the maturity date. The bank participating in a government capital injection program is required to fund the politically connected firm that has preferential access to financing.FindingsPolitical connection as such makes the bank more prone to risk taking at a reduced interest margin, produces greater safety for the bank owing to government capital injections, and leads to increasing the fair deposit insurance premium. The positive effect of political connection on the deposit insurance premium, which ignores the cap and the barrier yields significant over-estimation.Originality/valueThe study on the politically connected borrowing firm shows that political connection is likely to affect the distressed bank’s performance, yielding the political-connection cost of a reduced bank interest margin and the political-connection benefit of a reduced bank equity risk, contributing the literature on political connection and bank bailout.

Analysis of Proper Deposit Insurance Premium Rate for Korean Property & Liability Insurance Business

As of 2018 the deposit insurance premium rate for the Korean P&L insurance business is 0.15%, but it is not clear how they set the rate and on what basis. Also, the proper amount of target fund of deposit insurance for P&L insurance business seems to be lower than the current amount. This implies that the proper deposit insurance premium rate should be lower than the current rate of 0.15%. This study, using OPM (Option Pricing Model) to analyze deposit insurance premium rates, shows that the proper rate for the Korean P&L insurance business should be lower than 0.01%. In the near future, with the introduction of K-ICS (Korea Insurance Capital Standard), Korean insurers’ capital adequacy will be quite high and higher capital means lower default rate which should be a factor in lowering the deposit insurance premium rate. KDIC (Korea Deposit Insurance Corporation) needs to take this into account for its policy makings and lower the deposit insurance premium rate for the Korean P&L insurance business.

An Analytic Valuation of a Deposit Insurance

A deposit insurance is a measure to protect bank’s depositors fully or partly from the risk of losses caused by the banks failure to pay its debts when due. If the bank does not meet the payment since the asset value of the bank is less than debt, the guarantor will do the payment and take over the bank’s assets. The role of the guarantor is considered as a deposit insurance. Similar mechanism of the insurance to the European put option model, motivates the use of a Black-Scholes model in the valuation. The deposit insurance model is solved using a Fourier transform method analytically. Numerical results based on the solution confirms the results obtained by previous research. Also, some behaviours of the deposit insurance premium due to interest rate, volatility, and deposit-to-asset value ratio are presented.

Study on the legal issue about the management of the public funds in the insurance industry

1997년 말 외환위기로 금융부실문제를 정상화시키기 위하여 금융구조조정 등에 자금이 지원되었는데 이를 통상적으로 공적자금의 지원이라고 한다. 현재 공적자금은 2000 년 12월에 제정된 공적자금관리특별법에서 정한 공적자금(I)과 2009년 5월 개정된 공적자금 관리특별법에 따른 구조조정기금으로서의 공적자금(II)로 구분되고, 2008년 2월 금융위원회의 설치 등에 관한 법률 개정에 따라 이에 대한 관리업무를 금융위원회가 맡고 있다. 공적자금의 순환은 자금의 조성, 지원, 회수, 상환 및 사후관리인 5단계를 거치게 된다. 공적자금은 예금보험공사와 자산관리공사가 발행한 채권을 정부가 보증하는 방식으로 공공차관 또는 국유재산 등에서 조달한 공공자금으로 조성된다. 문제는 공적자금이 원칙에 맞지 않게 회수와 상환과정을 거치면 그 최종적인 책임은 정부가 지게 되고, 이는 고스란히 국민부담으로 된다. 더욱이 공적자금의 상환계획기간인 25년을 넘긴다면 공적자금 수혜세대와 상환세대가 달라져 세대갈등의 요인이 될 수 있다. 그러므로 공적자금의 회수 및 상환은 매우 엄격하게 이루어져야 한다. 현재 공적자금의 회수 절차에서는 회수율에 왜곡이 심각하다. 회수금액은 원리금이 아닌 원금을 기준으로 하고 있고 실제로 시간가치가 고려되고 있지는 아니하다. 또한 출자방식으로 한 공적자금의 지원의 경우 수령한 배당금도 공적자금 회수에 포함하고 있어 이에 대한 적절성이 문제가 된다. 또 다른 문제점으로는 2002년 ‘제1기 공적자금관리위원회’ 기간에 공적자금의 회수와 관련하여 그 상환의 불확실성이 있다고 판단하고 상환대책을 마련하였는데 당시 정부는 공적자금의 회수가 용이하지 않다고 추정되는 부채 69조원 중 재정과 금융회사 분담비율을 각각 49조원과 20조원으로 나누어 분담하는 것으로 정하고, 매 5년마다 이를 재산정하도록 한 바 있다. 그런데 최근 논의를 보면 초기와는 다른 시장환경이 조성되었음에도 불구하고 국가재 정의 의존도가 높은 49:20을 고수하려는 것은 문제가 있다. 공적자금 상환과 관련하여 가장 큰 문제는 공적자금 지원의 주원인이 은행권에서 발생한 것인데 공적자금 상환부담이 보험권에 과중하다는 것이다. 현행 보험권 예금보험료 및 상환 기금 특별기여금의 산정체계는 은행 등 타 금융업권 대비 불합리한 요소들이 있어 이에 대한 시급한 수정이 불가피하다. 이상의 문제점은 합리적인 근거와 형평성의 제고 차원에서 다시 논의되어져야 한다.In order to resolve the insolvency of the financial institutions due to Korean Financial Crisis in 1997, the Korean government (through its agency) provided the funds to the financial institution for the reorganization, which is called “publically supported funds”. The publically supported funds are classified to the public fund I pursuant to “Special Act on the Management of Public Funds” enacted in 2000 and public fund II pursuant to “Special Act on the Management of Public Funds” revised in 2009. Since 2008, the Financial Services Commission has been in charge of this work pursuant to “Act on the Establishment, etc. of Financial Services Commission” revised in 2008. The cycle of public funds goes through five stages: funding, support collection, repayment, and ex post facto management. The public funds are financed from the public loans or state-owned properties in a way of the bonds issued by the Korea Deposit Insurance Corporation and Korea Asset Management Corporation, and the bonds are guaranteed by the Korean government. However, if a financial institution which supported by public fund repay the money in accordance with the “principle”, the final responsibility will be borne by the government, and this will be borne by the public. Moreover, if the repayment period for public funds exceeds 25 years, it will be a factor of generation conflict due to the difference between beneficiaries and reimbursement parties. Therefore, the collection and repayment of public funds must be very strict. At present, there is a serious distortion in the recovery rate in the process of collecting public funds. The collection amount is only based on principal without the reflection of the time value. Also, in the case of the support of public funds in the way of equity, it requires the further study on adequacy in terms of the received dividend in the way of the collection for the supported public fund. The second issue is government policy. The government decided to share total debt amount, 69 trillion won which was uncertain about the repayment of related to the recovery of the public funds between the national finance and the financial institutions into 49 trillion won and 20 trillion won. Because of the uncertainty of repayment and recovery, the 1st Public Fund Management Committee pointed out it and the committee arranged another plan for it. However, in recent discussions, it is problematic to adhere to the ration, 49:20, which is highly dependent on national finances, despite the market environment is changed. The last material issue with the repayment of the public fund is that the liability to repay the public fund is heavily weighted to insurance industry even though the main reason for supporting public funds has occurred in the banking industry. The current calculation system of the deposit insurance premium and the special assessment in the insurance industry has unfairness in comparison with other indu stry such as banks. It is inevitable to amend the current calculation system. The above-mentioned issues should be discussed again in terms of rational basis and equity.

Measurement of Systemic Risk in a Common European Union Risk-Based Deposit Insurance System: Formal Necessity or Value-Adding Process?

Scientific discussions have emphasized that the main problem with the current deposit insurance system is that the current system does not evaluate the risks that banks assume to calculate the deposit insurance premiums in many countries of the European Union (E.U.). Thus, the prevailing system does not safeguard a sufficient level of stability in the banking system. Scientific studies show that the deposit insurance system should consider not only the risk indicators for individual banks, but it must also consider the systemic risk of banks that affects the stability of the banking system. Hence, the question arises as to whether measurements of systemic risk in a common E.U. risk-based deposit insurance system are a formal necessity or if they are a value-adding process. Expanding the discussion of scientists, this article analyzes how contributions to insurance funds would change the banks of Lithuania following the introduction of the E.U.’s overall risk-based deposit insurance system and after taking into consideration the additional systemic risk. The research results that were obtained provide evidence that the introduction of a risk-based deposit insurance system would redistribute payments to the deposit insurance fund between banks operating in Lithuania, and, thereby, would contribute to a reduction in the negative effects of the deposit insurance system and would improve the stability in the financial system.

A Comparative Study of Bank Risk-based Deposit Insurance Premium System Using Market Approach Method

A Comparative Study of Bank Risk-based Deposit Insurance Premium System Using Market Approach Method

Strategic bank closure and deposit insurance valuation

This study formulates the deposit insurance valuation problem as a zero-sum optimal stopping game using Israeli option with bankruptcy cost. Specifically, closure of a bank is framed as a game between the insured bank and the deposit insurer, in which a bank with financial difficulties is choosing an optimal self-closure point to maximize its benefits from the deposit insurance scheme; and the deposit insurer is choosing an optimal regulatory closure point to minimize their cost of offering the insurance. In such setting, the deposit insurance itself could be regarded as an Israeli put option. With bankruptcy costs taken into consideration, we managed to derive the closed-form solutions to the deposit insurance premium together with the endogenous closure points. Our model could also be used to justify the scenarios of too big to fail, reorganization of problematic bank, and regulator’s forbearance.

Effect of explicit deposit insurance premium on the moral hazard of banks’ risk-taking: Around the globe

The adoption of explicit deposit insurance increases the moral hazard of banks’ risk-taking, caused by the decrease in depositors’ discipline. Based on the contract theory, this study probes whether the inception of risk-based deposit insurance premium may limit the moral hazard of banks’ risk-taking triggered by the deposit insurance. This study conducted the analysis on 2,196 banks of 125 countries, covered by the Bankscope database from 2002 to 2014 period. The hierarchical linear models (HLM) were used for empirical estimation of research models. The findings revealed that risk-based deposit insurance premium deteriorated the moral hazard of banks’ risk-taking, incited by the enactment of explicit deposit insurance, while this effect was high for the small banks. Therefore, the small banks were more stable and positively affected by the selection of risk-based deposit insurance premium as compared to the larger counterparts. However, it cannot eliminate this negative effect completely. Hence, the implementation of the premium structure by policymakers on the finding of this study encouraged the depositors and investors’ confidence in the banking system around the globe.

An Optimal Investment Strategy and Multiperiod Deposit Insurance Pricing Model for Commercial Banks

We employ the method of stochastic optimal control to derive the optimal investment strategy for maximizing an expected exponential utility of a commercial bank’s capital at some future date T>0. In addition, we derive a multiperiod deposit insurance (DI) pricing model that incorporates the explicit solution of the optimal control problem and an asset value reset rule comparable to the typical practice of insolvency resolution by insuring agencies. By way of numerical simulations, we study the effects of changes in the DI coverage horizon, the risk associated with the asset portfolio of the bank, and the bank’s initial leverage level (deposit-to-asset ratio) on the DI premium while the optimal investment strategy is followed.

Information Disclosure, Deposit Insurance System and Systemic Risks of Banks

Based on an incomplete information dynamic game model, this paper theoretically analyzes the effects of information disclosure and deposit insurance system on systemic risks, and then makes an empirical test by using a panel data of 137 listed commercial banks in 24 countries from 2006 to 2014. It arrives at the following conclusions:firstly, the increase in information disclosure degree in banks helps to reduce financing costs and deposit insurance premiums, leads to the decrease in the correlation between assets of banks, and thereby reduces the systemic risks; secondly, financial stability effects of deposit insurance are not obvious, and the increase in information disclosure degree effectively relieves the moral hazard of deposit insurance system; there is synergistic effect between information disclosure degree and deposit insurance system in the aspect of the reduction in systemic risks. A design of reasonable deposit insurance system, experienced supervision authorities and strict supervision system help to play the restriction role of the market, impose restrictions on the moral hazard of deposit insurance, and thereby maintain the stability of financial system. Therefore, under the background of formal implementation of deposit insurance system, supervision authorities should strengthen information disclosure of banks and optimize the design of deposit insurance to better guard against systemic risks of financial system in China.

Pricing Deposit Insurance and Assessing Moral Hazard Behavior: Evidence from Banking Sector in Sudan

The purpose of this paper to evaluate the cost of deposit insurance premium and assess moral hazard behavior in the banking sector in Sudan. The analysis of moral hazard in this paper is based on two types of risks, credit risk, and technical efficiency risk (managerial efficiency). The findings of the paper indicates credit risk is positively associated with deposit insurance coverage, and technical efficiency performance is negatively associated with deposit insurance coverage. Also indicated that banks whose risk-based insurance premium is less than the fixed rate insurance premium (over-priced) are those banks with pure technical efficiency performance. These results imply when banks characterized with managerial inefficiency deposit insurance system can incite moral hazard behavior. Additional finding of the paper includes when banking sector is classified into homogenous groups (national, foreign, and mixed ownership) risk-based average deposit insurance premium is close estimate to the average credit default risk for each group.

Systematic risk and deposit insurance pricing

PurposeThe purpose of this paper is to alleviate the moral hazard problem created by deposit insurance and therefore develop a deposit insurance pricing model explicitly considering systematic risk.Design/methodology/approachUsing the market model, the authors introduce the systematic risk component consisting of market risk and beta risk. A closed-form solution for the authors’ pricing model is derived based on the option pricing framework.FindingsCompared with the authors’, the pricing model that ignores systematic risk underestimates deposit insurance premium, and cannot cover the excessive loss created by systematic risk. To examine the effect of the systematic risk component on the deposit insurance premiums estimated by the authors’ model, this paper also provides empirical evidence from China by regression analysis. The results demonstrate that, in addition to the individual failure risk, the systematic risk component is properly priced and explicitly reflected in the authors’ model.Research limitations/implicationsMore risk factors such as liquidity risk should be introduced in the pricing of deposit insurance.Practical implicationsDeposit insurance premiums estimated by the authors’ model can alleviate the moral hazard problem that banks have an incentive to take on excessive systematic risk, because substantial higher insurance premiums would be charged in doing so.Originality/valueApplying the option pricing theory and market model, this paper develops a deposit insurance pricing model with explicit consideration of systematic risk. The systematic risk component contains not only the market volatility but also the sensitivity of market risk.

(A Case Study on Payment of Deposit Insurance in Insurance Company Failures: Focusing on Advanced Countries)

Korean Abstract: 본 연구의 목적은 미국 일본 및 유럽 등 선진국 예금보험기관이 파산한 보험회사에 대하여 예금보험금을 지급한 사례를 분석하고 정리함으로써 국내 예금보험의 합리적인 운영에 도움을 줄 수 있는 시사점을 도출하는데 있다. 선진국의 파산정리 방법을 검토해 보면 청산방식은 손해보험사에 그리고 계약이전 방식은 생명보험사 사용하는 것이 일반적인 사례이다. 그러나 국내에서는 손해보험사도 생명보험사처럼 장기보험을 많이 판매하므로 계약이전 방식에 의한 소비자 권익보호가 우선해야한다는 결론을 내렸다. 그러나 계약이전 방식에서 오는 보험계약자의 도덕적 해이를 줄이기 위해서는 일본이나 영국과 같이 보험회사 파산시 계약자준비금 삭감, 예정이율 인하 등을 통하여 손실 분담을 하도록 하는 것이 타당하다는 판단이다. 아울러 선진국의 경우에도 보험사의 파산과 예금보험금 지급이 대형화되는 이유가 보험사의 무분별한 외형성장추구, 리스크관리 소홀 등에 있으므로 독일의 경우처럼 보험권역 내에서도 회사별 리스크 기준 차등요율제의 실시를 제안하였다. 그러나 보험권역에 대한 이러한 제도개선이 은행 등 타 금융권역과 비교하여 규제차손이 발생할 수 있으므로 영역 간 균형 있는 개선이 전제되어야 한다. 다른 한편 미국의 파산정리 과정에서 보듯이 기발생미보고준비금(IBNR), 재보험 및 책임보험과 관련하여 복잡한 소송이 많이 발생하고 그로 인한 자금소모가 크므로 국내에서도 관련 규정의 사전정비가 요구된다. English Abstract: The study examines cases of payment for the insured of insolvent insurers by Insurance Guarantee Schemes in advanced countries including the U.S., Japan, and some EU member countries to see what valuable implications they may have for the efficient operation of the Korea Deposit Insurance Corporation (KDIC). The first finding is that defaulted non-life insurers are generally liquidated by discontinuing insurance contracts and paying insurance benefits or refunding unearned premiums to the insured whereas life insurer failures are usually handled by transferring insurance policies to another insurer. Nevertheless, since non-life insurers in Korea also sell long-term insurance products as life insurers do, it would be desirable if insolvent domestic non-life insurers would be cleaned out by transferring all policies to another sound insurer. However, this paper recommends that some measures should be put in place to reduce moral hazard which will increase with the adoption of contract transfer. By emulating Japanese and UK cases, a plan might need to be developed to reduce policy reserves and/or assumed interest rates to distribute losses incurred by an insurer's default between KDIC and policy holders. Such a co-sharing plan should be applied to all financial sectors including insurance and banking to remove a regulatory arbitrage gain or loss. In addition, this paper recommends introducing a risk-based deposit insurance premium system, similar to that of Germany, to reduce moral hazard of insurers who would otherwise attempt to pursue external growth imprudently and take too much risk in their business. In advanced countries, most insolvencies of insurers were found to have resulted from reckless management without properly managing risk which, in turn, led to huge losses. On the other hand, this paper suggests that KDIC should check and streamline insurance-related regulations in advance to avoid unnecessary legal conflicts with various stakeholders of insolvent insurers in handling IBNR reserves, reinsurance payments, and long-term development of losses in liability insurances. The more legal conflicts there are, the higher expenses will be, which will cause more serious erosion to the net worth of the insolvent insurer.

Deposit Insurance in General Equilibrium

We study the consequences and optimal design of bank deposit insurance in a general equilibrium model. The model involves two production sectors. One sector is financed by issuing bonds to risk-averse households. Firms in the other sector are monitored and financed by banks. Households fund banks through deposits and equity. Deposits are explicitly insured by a deposit insurance fund. Any remaining shortfall is implicitly guaranteed by the government. The deposit insurance fund charges banks a premium per unit of deposits whereas the government finances any necessary bail-outs by lump-sum taxation of households. When the deposit insurance premium is actuarially fair or higher than actuarially fair, two types of equilibria emerge: One type of equilibria supports the socially optimal (Arrow-Debreu) allocation, and the other type does not. In the latter case, bank lending is too large relative to equity and the probability that the banking system collapses is positive. Next, we show that a judicious combination of deposit insurance and reinsurance eliminates all non-optimal equilibrium allocations.

The effects of public capital infusions on banks’ risk-shifting to the deposit insurance system in Japan

Using option pricing based models, we compute the actuarially fair deposit insurance premium and the market value of assets and asset volatility for Japanese banks as implied by their stock prices. The findings based on these variables suggest that banks shift risks to the deposit insurer who charges them risk insensitive premiums. Well-designed regulatory policies in response to the crisis, however, effectively restrain banks’ risk-shifting. Not only did the introduction of the prompt corrective action discipline insured banks, but large-scale public capital infusions successfully deleveraged banks whose assets are risky. This effectively mitigated banks’ risk-shifting.

Estimating the Deposit Insurance Premium from Bank CDS Spreads: An Application of the Structural Approach with a Normal Firm Value Diffusion Process

The new structural model of credit risk based on a normal firm value diffusion process can infer the firm value volatility from bank credit spreads that closely agreeing with the empirically estimated firm value volatility. We use the spread-implied firm value volatility as the model volatility input to predict the deposit insurance premium. For large U.S. banks from 2006 to 2015, the average spread-implied firm value volatility is approximately 22%, while the average model predicted deposit insurance premiums are 8 and 18 basis points per annum for 5- and 10-year deposit insurance contract maturity, respectively.