Search Results
Conference Paper
The implications of FDICIA for bank management
Working Paper
Did FDICIA enhance market discipline on community banks? a look at evidence from the jumbo-CD market
The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) directed the FDIC to resolve bank failures in the least costly manner, shifting more of the failure-resolution burden to jumbo-CD holders. We examine the sensitivity of jumbo-CD yields and runoffs to failure risk before and after FDICIA. We also examine the economic significance of estimated risk sensitivities before and after the Act, looking at the implied impact of risk on bank funding costs and profits. The evidence indicates that yields and runoff were sensitive to risk before and after FDICIA, but that this ...
Journal Article
Deposit insurance, too-big-to-fail and small banks
Journal Article
Final rule issued January 5, 1993
Journal Article
Federal Reserve lending to troubled banks during the financial crisis, 2007-2010
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: Did the Federal Reserve violate either the letter or spirit of the law by lending to undercapitalized banks? Did Federal Reserve credit constitute a large fraction of the deposit liabilities of failed banks during their last year before failure? The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) imposed limits on the number of days that the Federal Reserve ...
Journal Article
Atlanta Fed examines deposit insurance reform and FDICIA
Working Paper
The major supervisory initiatives post-FDICIA: Are they based on the goals of PCA? Should they be?
The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: "to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund." Yet performance of the regulators in achieving this goal has been lacking in that substantial losses continue to be imposed on the insurance funds when banks fail. Is PCA misguided, or are there incentive defects in the law and how the requirements are being administered? This paper analyzes these issues in the context of recent proposals to reform the deposit ...
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.