Supervision and the Great Deposit Insurance Debacle
Part of the The Jerome Levy Economics Institute Series book series (JLEI)
The great deposit insurance debacle of the 1980s and 1990s has prompted a number of recent studies of the debate surrounding the creation of federal deposit insurance. (Barth, 1991; Barth and Bartholomew, 1992; and Flood, Chapter 3 of this volume). These studies show that the members of Congress who created the FDIC during the New Deal were well aware of the potential risks. Flood, for instance, concludes as follows:
It is obvious from an examination of the record that the debate surrounding the adoption of federal deposit insurance was both wide-ranging and well-informed.
KeywordsDeposit Insurance Capital Ratio Banking Failure Banking Risk Bank Supervision
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© Dimitri B. Papadimitriou 1996