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<keyword id="19922074" type="General" weightage="20" keywordseo="Reserve-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="Reserve Bank" meta.hostid="261" meta.entityid="Reserve Bank">Reserve Bank</keyword> Deputy Governor <keyword id="19918795" type="General" weightage="20" keywordseo="Swaminathan" source="keywords">Swaminathan</keyword> J on Wednesday said implementation of <keyword id="22784242" type="General" weightage="100" keywordseo="risk-based-premium" source="keywords">risk-based premium</keyword> for <keyword id="20132734" type="General" weightage="20" keywordseo="deposit-insurance" source="keywords">deposit insurance</keyword> merits consideration as it will ensure that institutions with higher risk profiles contribute more to the insurance fund. Speaking at a conference in Jaipur, he also said that as the financial sector becomes more digitised, deposit insurers must work closely with regulators and supervisors to strengthen oversight mechanisms. This includes regularly updating <keyword id="19946068" type="General" weightage="20" keywordseo="regulatory-frameworks" source="keywords">regulatory frameworks</keyword> to incorporate emerging risks associated with <keyword id="19989657" type="General" weightage="20" keywordseo="digital-payments" source="keywords">digital payments</keyword>, <keyword id="19906883" type="General" weightage="20" keywordseo="cybersecurity" source="keywords">cybersecurity</keyword>, and <keyword id="22180855" type="General" weightage="20" keywordseo="fintech-innovations" source="keywords">fintech innovations</keyword>. By adopting a proactive stance, deposit insurers can help ensure that <keyword id="19912054" type="General" weightage="20" keywordseo="financial-institutions" source="keywords">financial institutions</keyword> under their purview are adequately prepared to manage these risks, thereby safeguarding depositor confidence. Swaminathan was addressing the International Conference of the International Association of Deposit Insurers- Asia Pacific Regional Committee (IADI-APRC) hosted by the Deposit Insurance Credit Guarantee Corporation (DICGC). He further said the implementation of risk-based premium for deposit insurance "merits consideration". "By tying insurance premiums to the level of risk posed by individual financial institutions, deposit insurers can incentivize banks to adopt stronger risk management practices. "This approach not only enhances the overall stability of the financial system but also ensures that institutions with higher risk profiles contribute more to the insurance fund," the deputy governor said. He also emphasised that deposit insurers can further mitigate technology risks by relying on supervisory rating assessments that incorporate evaluation of a financial institution's technological and operational resilience. By using these assessments as a basis for setting insurance premiums or determining intervention strategies, deposit insurers can ensure that their actions are informed by a comprehensive understanding of each institution's risk profile, Swaminathan added. The senior <keyword id="19899808" type="General" weightage="20" keywordseo="RBI" source="keywords">RBI</keyword> official also asked deposit insurers to prioritise crisis preparedness and develop comprehensive contingency plans that account for technology-induced disruptions. This includes conducting regular stress tests and simulations to assess the potential impact of cyber incidents or fintech failures on financial institutions and the broader financial system, he said. The evolving technological landscape presents both significant challenges and opportunities for deposit insurers. By adopting a proactive, risk-based approach, including enhanced oversight, risk-based premiums, reliance on supervisory ratings, faster claim settlements, and industry collaboration, deposit insurers can effectively manage these risks, the deputy governor said.

Risk-based premium for deposit insurance merits consideration: RBI Deputy Governor Swaminathan

<ul class="summary-list"><li>Axos Financial fell as much as 15% on Tuesday after Hindenburg Research announced a short position.</li><li>The short bet stems from Axos' large exposure to commercial real estate.</li></ul>Shares of <a href="https://markets.businessinsider.com/stocks/ax-stock">Axos Financial</a> dove as much as 15% on Tuesday after short seller Hindenburg Research announced a bet against the California-based bank.In a <a href="https://hindenburgresearch.com/axos/" target="_blank" rel="noopener">note</a>, the research firm outlined that it's taken a short position in the lender, citing Axos' rising exposure to commercial real estate. Despite brewing uncertainty in the sector, the bank has been building a portfolio around it, the report said."Contrary to many peers who backed away from the deteriorating commercial real estate market post-covid pandemic, Axos doubled down, increasing its total exposure from $5.5 billion in March 2021 to $9.9 billion in March 2024," Hindenburg said. "Now, 53% of Axos' total loan book is exposed to these segments."Between higher interest rates and a declining demand for office properties, analysts are waiting for a loan crisis to eventually swamp the real estate market. With over <a href="https://www.businessinsider.com/office-commercial-real-estate-crash-price-correction-debt-morgan-stanley-2024-2">$2 trillion in debt coming due in the next few years</a>, lenders have been shrinking their exposure to the space — <a href="https://www.businessinsider.com/banks-commercial-real-estate-loan-sales-debt-interest-rates-2024-1">sometimes at a loss</a>.To compare with Axos, the noted cited that the average direct commercial real estate exposure among regional banks is 16.5% on loan books.But not only has Axos increased its position, the bank trades at a 35% price to tangible book value premium to its peers, Hindenburg said. That implies outsized growth, a low-risk loan book, and years of upside ahead of it, the note argued.But instead, Hindenburg's research "indicates a company exposed to the riskiest asset classes with lax underwriting standards and a loan book filled with multiple glaring problems," it said. According to sources who spoke with Hindenburg, issues include a client base of doubtful and non-performing borrowers.Through a Securities and Exchange Commission <a href="https://investors.axosfinancial.com/sec-filings/documents/default.aspx" target="_blank" rel="noopener noreferrer">filing</a> published Tuesday, Axos challenged Hindenburg's report as inaccurate and misleading.Among criticisms was a failure to mention fund partners backing Axos' credit position, it said, "as well as inaccurate discussions of loans that that have already been repaid but not represented in the report as having been repaid."CEO Greg Garrabrants also previously told <a href="https://www.bloomberg.com/news/articles/2024-02-02/trump-tower-lender-calls-fear-of-bank-property-turmoil-overblown" target="_blank" rel="noopener">Bloomberg</a> that commercial real estate fears are overdone, and the risk is already reflected by Axos' stock price.Though not mentioned in the report, among the bank's former borrowers are president Donald Trump. Axos has previously refinanced a <a href="https://www.bloomberg.com/news/articles/2022-03-09/trump-scores-a-new-100-million-loan-for-flagship-new-york-tower" target="_blank" rel="noopener">$100 million loan on Trump Tower</a>, and lent funds to a Florida resort.

Trump lender Axos plunges 15% after short-seller report flags real-estate loan risk

<ul class="summary-list"><li>Ocala has the lowest risk of coastal flooding in Florida, analytics platform Climate Alpha found.</li><li>One real-estate agent has seen an influx of people from South Florida seeking "peace and security."</li></ul>Some Floridians are leaving their coastal homes due to the risk of extreme weather events and increasing insurance premiums —but they aren't going too far. They're descending on Ocala, a 64,000-person inland town located centrally in the state and an hour drive north of Orlando, the <a href="https://www.wsj.com/real-estate/ocala-florida-hurricanes-2a991853?mod=real-estate_lead_story" target="_blank" rel="noopener">Wall Street Journal reports</a>. Dubbed the "Horse Capital of the World" for its many equestrian facilities, the small town is now a hotspot for those who want to stay in the Sunshine State but are seeking higher elevation. "By the time a hurricane reaches us, they lose steam," Ocala real-estate agent Courtney Moody told Insider. "It's mostly a rainstorm."Moody said that the town's reputation for its elevation — nearly 100 feet above sea level — has made Ocala an attractive destination for homebuyers. "They like the sense of peace and security," she said. For some, it's too late. Moody said she's shown houses to hurricane-stricken South Floridians, who just the week before "had water up to their window sills inside of their home." For others, the move is pre-emptive. Recently, Moody worked with a couple from Miami that was looking to put down roots for a family and were attracted to the "stability" of Ocala. The couple bought a six-bedroom home for $950,000 with plans for a growing family. They were happy to move far away from not only the risk of extreme weather events, but also the rising insurance premiums tied to coastal communities."Florida's going through an insurance crisis," she told Insider.<h2>Relief 100 feet above sea level</h2>Ocala came out on top in a study by climate-software company Climate Alpha for the Journal. It evaluated Florida towns based on federal government weather forecasting models, the quality of local infrastructure, the number of hospital beds nearby, and other factors. Clinching the spot as Florida's city with the "lowest risk of coastal flooding," according to Climate Alpha, Ocala also passed with flying colors as a town with a low risk of flooding compared to other inland towns.<div type="image" title="Cattle rancher in Ocala, Florida" height="3511" width="4682" msid="104260234" hostid="261" sizebytes="1451154"></div>Of course, Ocala is not completely immune to hurricanes, as the Journal noted 2017's Hurricane Irma caused some power outages and flooding. However, the Ocala Police Department told the outlet that there was no significant damage during Hurricane Idalia this past August.<h2>Floridians navigate rising insurance premiums </h2>Jo Anne and Ed Lewis used to get "hunched up" shoulders when hurricane season arrived in their town of Bonita Springs on the west coast of Florida, the Journal reported.When seeking cover from a hurricane this past August, they happened upon idyllic Ocala and decided to make a new inland home. Significant for the couple, their combined deductible premium — one for home damage and another for hurricane damage — now totals $6,000 compared to the $20,000 for their home in Bonita Springs. <div type="image" title="Aerial view of downtown Ocala, Florida" height="2160" width="2880" msid="104260235" hostid="261" sizebytes="468526"></div>The average insurance premiums for Florida residents has tripled in the past five years, according to Insurance Information Institute data collected by the Journal. Major insurers have cut coverage in the state, as the increasing volatility of extreme weather causes many to re-evaluate their portfolios. <a href="https://www.businessinsider.com/personal-finance/farmers-insurance-florida-stops-home-auto-insurance-2023-7">Farmers Group stopped offering new home insurance policies</a> altogether in Florida earlier this year.As a result, Florida residents are struggling. Danny Collins, who lives in Hobe Sound, Florida, just north of West Palm Beach, previously told Insider his <a href="https://www.businessinsider.com/my-mortgage-in-florida-went-up-1000-because-of-potential-flooding-2023-7">mortgage jumped $1,000 under new insurance premiums</a>. Bob Stephens, who lives in the Florida Keys, previously shared with Insider that he <a href="https://www.businessinsider.com/how-insurers-will-shape-where-people-live-climate-change-2023-7">has not been able to find insurance</a> that fully covers his $3 million home in Marathon. Ocala is located in one of Florida's cheapest counties for insurance, Marion, with average premiums hovering around $1,800 compared to $5,600 in Miami-Dade County and $7,500 in counties closer to the Florida Keys, according to the Journal. For Florida residents eyeing Ocala, that's a huge relief, said Moody. "You're not getting a coast," she said, "but you are getting rid of high insurance costs, high housing costs, and your home potentially washing away."

Floridians are relocating to the center of the state to try to avoid hurricanes — and high insurance premiums

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Risk-based premium for deposit insurance merits consideration: RBI Deputy Governor Swaminathan

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Trump lender Axos plunges 15% after short-seller report flags real-estate loan risk

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Floridians are relocating to the center of the state to try to avoid hurricanes — and high insurance premiums

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