The reform of federal deposit insurance: the options



Discussion of federal deposit insurance reform is currently under way in the United States. The current pressures on deposit insurance funds are thought to have contributed to the present instabilities of the US financial system. The author reviews the issues being raised by the current review. Reform is definitely going to happen, but the nature of such reform is still open to question. Where principles appear to be clear, the practicalities often are not.


JEL: G21


Federal deposit insurance, U.S., Reform

Full Text:



AMERICAN BANKERS ASSOCIATION (ABA), Federal Deposit Insurance: A Program for Reform,

March 1990.

BAER, H., "Private Prices Public Insurance: the Pricing of Federal Deposit Insurance",

Economie Perspectives, FederaI Reserve Bank of Chicago, 9, September/October

, pp. 45-57.

BARTH, J.R., "Post-PIRREA: The Need to Reform the FederaI Deposit Insurance

System", paper presented at the 26th Annuai Conference 00 Bank Structure and

Competition organised by the FederaI Bank of Chicago (Chicago, May 1990).

BENSTON, G.}., "Deposit Insurance and Bank Failures", Economie Review, FederaI

Reserve Bank of Atlanta, March 1983, pp. 4-17.

BENsToN, G.]., "Market Value Accounting: Benefits, Costs and Incentives" in Proceedings

the 25th Annual Conlerence on Bank Structure and Competition, Part XII, pp.

-563 (Federal Rese!'ve Bank of Chicago, 1989).

BENSTON, G.]., et al. (eds.), Perspectives on Safe and Sound Banking: Past, Present and

Future (MIT Press, Cambridge, Massachusetts, 1986).

BENSTON, G.]., and KAUFMAN, G.G., "Risk and Solvency Regulation of Depository

Institutions: Past Policies and Current Options", Monograph Series in Finance and

Economics, 1988a-1, Salomon Brothers Centre far tbe Study of Financial Institu~

tions (New York University, 1988).

BIERWAG, G.O. and Kaufman, G.G., "A Proposai for FederaI Deposi! Insurance with

Risk Sensitive Premiums", OccasionaI paper No. 83-3, FederaI Reserve Bank of

Chicago, March 1983.

EISENBEIS, R.A. and HORVITZ, P.M. "Market Discipline", Chapter 7, pp. 173-202, in

Bensron, G.J. et al. (eds.) 1986.

ELy, A., "Yes - Private Sector Depositar Protection is a Viable Alternative to FederaI

Deposit Insurance" in tbe Proceedings 01 the 21st Annua! Conlerence on Bank

Structure and Competition (Federai Reserve Bank of Chicago, 1985).

ENGLAND, c., (lA Market Approach to the Savings and Loan Crisis" in Crane, E.H. and

Boaz, D. (eds), An American Vision: Policies for the 90's (Cato Institute, Washington,

D.C., 1989).

FAMA, E.F., "What's different about banks?", Journal 01 Monetary Economics, Val. 15, pp.

·39, 1985.

FEDERAL DEPOSIT INsuRANcE CORPORATION (FDIC), Deposit Insurance in a Changing

Environment, Washington, D.C., Aprii 1983.

FEDERAL HOME LOAN BANK BOARD (FHLBB), Agenda for Relorm: A Report on Deposi!

Insurance to the Congress Irom the FHLBB, Wasbington, D.C., March 1983.

FLANNERY, M.]., "Pricing Deposit Insurance wben the Insurer Measures Risk witb Error"

in Proceedingr 01 the 25th Annua! Conlerence on Bank Structure-and Competition, Part

III, pp. 70-100, (Federa! Reserve Bank of Chicago, 1989).

GIBSON, W.E., ,"Deposit Insurance in the United States: Evaluation and Reform", Journal

Financial and Quantitative Ana!ysis, 7, March 1972, pp. 1575-1594,

Banca Nazionale del Lavoro

GOODMAN, L.S. aod SHAFFER, S., "The Economics of Deposit Insurance: A CriticaI

Evaluation of Proposed Reforms", Yale Journal on Regulation, 2, 1984, pp.


GREENSPAN, A., Testimony belore the House Banking Committee, Washington, 23 January

HALL, M.J.B., uThe Deposit Protection Scheme: The Case For Reform", National

Westminster Bank Quarterly Review, August 1987, pp. 45-54.

HALL, M.].B., "The BIS CapitaI Adequacy 'Rules': A Critique", in tm3 Review, June

, pp. 207-227.

HALL, M.I.B., "The S&L Crisis: A Regulatory Nightmare", mimeo, September 1990.

HORVITZ, P.M., "Failures of Large Banks: Implications for Deposit Insurance aod

Banking Supervision", Journal 01 Financial and Quantitative Ana!ysis, lO, November

, pp. 589-601.

HORVITZ, P.M., "The Case Against Risk-Related Deposit Insurance Premiums", Housing

Finance Review, VoI. 2, No.3, ]uly 1983, pp. 253-263.

HORVITZ, P.M., "Government Deposit Insurance", Chapter 3, pp. 81·90, in Benston, G.].

et al. eds., 1986a.

HORVITZ, P.M., "Alternative Ways to Resolve Insolvencies", Chapter 4, pp. 91·108, in

Benston, G.J. et al. eds., 1986b.

KANE, E.]., "A Six-Point Program for Deposit Insul'ance Refol'm", Housing Finance

Review, 2, July 1983, pp. 269-278.

KANE, E.]., The Gathering Crisis in FederaI Deposit Insurance (MIT Press, Cambridge,

Massachusetts, 1985).

KANE, E.]., "Market VaIue Reporting", Chapter 8, pp. 203·225, in Benston, G.]. et al.

eds., 1986a.

KANE, E.]., "Risk~Related Premiums", Chapter 9, pp. 227-244, in Benston, G.]. et al.

ed,., 1986b.

LITAN, R.E. "Wbat Sbould Banks Do?", The Brookingr Institute, Washington, D.C., 1987.

McCuLLocH, ].H., "Interest Rate Risk and CapitaI Adequacy for Traditional Banks and

Financial Intermediaries" in Maisel, S.J. (ed.), Risk and CapitaI Adequacy in Com·

mercial Banks, pp. 223·248, National Bureau of Economie Research Monograph,

(University of Chicago Press, Chicago, 1981).

MERTON, R.e., "On the Cost of Deposit Insurance When There Are Surveillance Costs",

fournal 01 Business, 51, July 1978, pp. 439-452.

SCOTT, K.E., "Never Again: the S&L Ballout Bill", Paper presented at the 26th Annual

Conference on Bank Structure and' Competition organised by the FederaI Reserve

Bank of Chicago (Chicago, May, 1990).

SCOTT, K.E. and MEYER, T., "Risk and Regulation in Banking: Some Proposals for

Deposit Insurance", Stanlord Law Review, 23, May 1971, pp. 857-902.

WHITE, L.]., "The Reform of FederaI Deposit Insurance" in the Proceedings 01 the 25th

Annual Conlerence 011 Bank Structure and Competition, Part XIII, pp. 575·604,

(Fedeta! Reserve Bank of Chicago, 1989).


  • There are currently no refbacks.

Copyright (c) 2016 M.J.B. HALL

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.



Sponsored by   

ISSN 2037-3643

Reg. Tribunale di Roma n.377/2009 del 19/11/2009