The Problem With Deposit Insurance

http://www.futureofcapitalism.com/2010/06/the-problem-with-deposit-insurance

Robert Pozen has a piece in the Wall Street Journal pushing back against the expansion of deposit insurance. His fall-back position: "If political pressures require a permanent expansion of FDIC insurance of bank deposits, Congress should move to a two-tiered structure. The FDIC should fully guarantee the first $100,000 in any bank account, and should guarantee a lesser percentage (e.g., 80%- 90%) of any amount in that bank account between $100,000 and $250,000. That compromise would help community banks, retain a measure of market discipline, and reduce the FDIC's costs in resolving bank failures."

by Editor  |  Jun 23, 2010 at 10:25 am Related Topics:  Capital Markets Regulation, FDIC, Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list