Deposit Insurance Funds: Analysis of Insurance Premium Disparity Between
Banks and Thrifts (Testimony, 03/23/95, GAO/T-AIMD-95-111).

Congress, regulators, and others have expressed concern that a
significant insurance premium disparity between banks and thrifts could
arise when the Federal Deposit Insurance Corporation lowers bank
premiums once the Bank Insurance Fund is fully recapitalized.  It is
expected that thrift premiums could be as much as five times greater
than bank premiums because thrift premiums would have to remain higher
to fully capitalize the Savings Association Insurance Fund.  Also,
higher thrift premiums will be needed to pay interest on bonds issued to
help pay for resolving the thrift crisis that developed in the 1980s.
Concerns have been raised that high premiums would place thrifts at a
competitive disadvantage with banks.  This testimony (1) discusses the
likelihood, the potential size, and the timing of a premium rate
differential between banks and thrifts; (2) analyzes possible effects of
the premium rate differential on the two industries; (3) assesses
potential adverse effects on the Savings Association Insurance Fund's
viability; and (4) identifies ways to avoid or mitigate problems that
the premium rate differential may create.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-AIMD-95-111
     TITLE:  Deposit Insurance Funds: Analysis of Insurance Premium 
             Disparity Between Banks and Thrifts
      DATE:  03/23/95
   SUBJECT:  Funds management
             Insured commercial banks
             Bank failures
             Insurance premiums
             Financial institutions
             Trust funds
             Savings and loan associations
             Capital
             Bank deposits
             Interest rates
IDENTIFIER:  Bank Insurance Fund
             Savings Association Insurance Fund
             BIF
             SAIF
             
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