Deposit Insurance: Summary of Analysis of Reform Proposals

GAO studied the interrelationship of financing, risk, and industry structure in the deposit insurance system and discussed proposals for reform, specifically: (1) how the Federal Deposit Insurance Corporation (FDIC) and the Federal Savings and Loan Insurance Corporation (FSLIC) treat the largest commercial banks and savings institutions which they insure; (2) financing deposit insurance without relying on taxpayer subsidies; (3) varying insurance premiums according to the degree of risk posed by individual institutions; (4) protecting the deposit insurance system by increasing minimum capital requirements for some or all insured institutions; (5) achieving an appropriate degree of consistency between the FDIC and FSLIC insurance programs; and (6) defining the roles of insured deposits and of insured institutions in the economy.