Bank Insurance Fund:

Review of Loss Estimation Methodologies

AIMD-94-48: Published: Dec 9, 1993. Publicly Released: Jan 10, 1994.

Additional Materials:


Office of Public Affairs
(202) 512-4800

Pursuant to a congressional request, GAO reviewed certain public and private-sector estimates of bank failures and related losses incurred by the Bank Insurance Fund (BIF), focusing on the: (1) various approaches used by these forecasters in estimating bank failures and losses; and (2) similarities, differences, and key assumptions of their estimation methodologies.

GAO found that: (1) the forecasters' BIF loss estimates vary widely because of differing methodologies and assumptions; (2) the forecasters' methodologies share some characteristics such as reliance on professional judgment and banks' unaudited quarterly reports of their financial condition and income; (3) the methodologies significantly differ in their use of data from sources other than call reports, assumptions, the way BIF losses are estimated from future resolution activity, and the time periods on which the projections are based; (4) bank failure estimates and their impact on BIF are uncertain because of their dependence on unpredictable events and forecasters' incomplete disclosure of their methodologies; (5) the Federal Deposit Insurance Corporation (FDIC) is in the best position to provide meaningful loss estimates because of its access to information on the actual costs of bank failure resolutions; and (6) FDIC needs to maintain a well-capitalized BIF because of the uncertainties in long-range loss estimates.

Sep 5, 2018

Jul 19, 2018

Jul 18, 2018

Jun 26, 2018

Mar 22, 2018

Mar 16, 2018

Mar 15, 2018

Feb 27, 2018

Looking for more? Browse all our products here