6  BIS Review 49/2009  Emerging markets can be expected to move towards greater exchange rate flexibility if and when the monetary policy stance of advanced economies – for reasons that are either cyclical or structural in nature – becomes increasingly inconsistent with higher inflation rates in emerging countries.
What, then, should the bank supervisory authorities, including the Bank, do to prepare for the removal of blanket deposit insurance? They need to prove that they have developed a sufficient crisis management system to prevent the materialization of systemic risk and ensure financial system stability.