Deposit Insurance Funds:

Analysis of Insurance Premium Disparity Between Banks and Thrifts

T-AIMD-95-223: Published: Aug 2, 1995. Publicly Released: Aug 2, 1995.

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO discussed the premium rate disparity between banks and thrifts that will develop when the Federal Deposit Insurance Corporation (FDIC) reduces the premium rates that member institutions pay to the Bank Insurance Fund (BIF). GAO noted that: (1) a major premium rate disparity between banks and thrifts will develop in late 1995 after BIF is recapitalized; (2) the Savings Association Insurance Fund (SAIF) will remain undercapitalized for the next few years and faces exposure from troubled thrifts, since it has assumed responsibility for resolving problem thrifts from the Resolution Trust Corporation; (3) using SAIF premiums to help resolve the thrift crisis has delayed SAIF capitalization; (4) SAIF shrinking deposit base could result in a continuing major premium disparity between banks and thrifts after SAIF is capitalized in 2002; (5) the premium differential will increase thrift costs and its duration will determine its impact, which will be most severe for thrifts with low earnings and capital; (6) thrifts may replace deposits with nondeposit sources of funding in order to reduce their costs relative to banks; and (7) thrifts are considering obtaining bank charters to lower deposit insurance fees that could further shrink SAIF deposit base and affect members' ability to pay bond interest.

Mar 27, 2014

Mar 6, 2014

Feb 20, 2014

Jan 24, 2014

Oct 29, 2013

Sep 30, 2013

Sep 26, 2013

Jul 29, 2013

Jul 24, 2013

Jul 10, 2013

Looking for more? Browse all our products here