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Journal Article
Deposit insurance reform in the FDIC Improvement Act: the experience to date
In 1991, the U.S. adopted fundamental deposit insurance reform in the FDIC Improvement Act. This article reveals why such reform was necessary in light of the severe banking crisis of the 1980s and analyzes its success to date.
Journal Article
FDICIA's discount window provisions
A description of the evolution of supervisory policy toward failing banks over the past two decades, with particular emphasis on the modifications to Federal Reserve Banks' discount window administration as set forth by the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA).
Report
Fixing FDICIA: a plan to address the too-big-to-fail problem
1997 Annual Report Essay
Working Paper
Federal Reserve lending to troubled banks during the financial crisis, 2007-10
Numerous commentaries have questioned both the legality and appropriateness of Federal Reserve lending to banks during the recent financial crisis. This article addresses two questions motivated by such commentary: 1) Did the Federal Reserve violate either the letter or spirit of the law by lending to undercapitalized banks? 2) Did Federal Reserve credit constitute a large fraction of the deposit liabilities of failed banks during their last year prior to failure? The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) imposed limits on the number of days that the Federal ...
Journal Article
The role of bank capital in a post-FDICIA world
FDICIA outlines a system of bank supervision based on capital. This paper examines two of the assumptions behind this supervisory system. These are that banks will engage in more risky behavior as capital declines, and that reported capital ratios are leading indicators that accurately reflect a bank's condition. ; Studies of bank failures during the 1980s have failed to clearly demonstrate that bank supervisors allowed troubled banks to engage in such risky activities as paying excessive dividends or excessive growth. In addition, historical studies show that capital tends to be a ...
Journal Article
Supervisory enforcement actions since FIRREA and FDICIA
In response to banking crises in the 1980s, Congress passed two laws that expanded enforcement powers of financial institution supervisors, including the Federal Reserve. At the time, some observers warned that these new powers would be misused. A careful analysis of enforcement actions taken over the past 15 years indicates that these concerns were unwarranted.
Journal Article
Making the SAIF safe for taxpayers
A presentation of some of the options for recapitalizing the Savings Association Insurance Fund, with particular emphasis on merging it into the FDIC's Bank Insurance Fund.
Journal Article
Too-big-to-fail after FDICIA
This reprint of a 1993 article outlines what Congress intended the Federal Deposit Insurance Corporation Improvement Act of 1991 to accomplish. A new preface discusses FDICIA's successes and failures as well as research calling for clearer policies to deal with the problem of "too big to fail" banks.