Merging The Deposit Insurance Funds

Author : Konrad Szela̢g
Publisher :
ISBN 13 :
Total Pages : 120 pages
Book Rating : 4.:/5 (75 download)

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Download or read book Recent Reforms of the Deposit Insurance System in the United States written by Konrad Szela̢g and published by . This book was released on 2009 with total page 120 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper is mostly related to the United States. It first outlines the main features of the US deposit insurance system prior to the recent reforms. Then, the paper presents the reasons and results of the 2005-2007 reform of the deposit insurance system in the United States. The results are relating to merging the former insurance funds into a new one, providing the FDIC with greater flexibility in managing the fund and in setting risk-based premiums, maintaining the standard coverage limit at $100,000 but increasing the coverage limit for retirement accounts to $250,000, and indexing both to inflation, etc. Next, the paper presents the 2008-2009 reform the was prompted by the aggravation of the current financial crisis (which had been started by the US subprime mortgage crisis in 2007). It discusses two main elements of this reform, i.e. temporarily increasing the standard coverage limit to $250,000 and the restoration plan in order to restore the fund's reserve ration to the required level. Moreover, the paper discusses some potential changes to the US deposit insurance system that could be implemented in the future -- also suggesting that, even after the recent reforms, there is still some room for further reforming the system.