Supervision of Banks by the Federal Deposit Insurance Corporation Can Be More Efficient

FOD-77-8: Published: Dec 22, 1977. Publicly Released: Dec 22, 1977.

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As a result of a Congressional request that GAO review the supervisory activities of the three Federal bank regulatory agencies, GAO was granted unrestricted access to bank examination reports and related records. The Federal Deposit Insurance Corporation (FDIC) maintains public confidence in the Nation's banking system by protecting depositors and encouraging sound banking, primarily through deposit insurance and bank supervision.

The deposit insurance fund presently exceeds $7 billion and is available to meet future losses resulting from bank failures. The insurance fund is adequate to meet potential losses that might result from problem conditions known to exist in specific insured banks at the end of 1976. The financial statements in the report present fairly the financial position of FDIC as of December 31, 1975 and December 31, 1976, and the results of its operations and changes in financial position for the years then ended.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Chairman of the Federal Deposit Insurance Coporation should: require periodic internal audits of its Division of Bank Supervision which is responsible for the examination and supervision of banks; develop more definitive criteria for classifying those banks not appearing on the problem bank list; require more complete documentation of the decisionmaking process for classifying banks; and initiate discussions of some additional common problem areas with the other supervisory agencies.

    Agency Affected:

 

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