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Most of the nation's largest banks are on the verge of insolvency, and the Federal Deposit Insurance Corp. does not have enough money to cope with the coming crisis, according to a congressional study due for release Monday.

In a deep recession, the FDIC's bank fund, used to pay off depositors when banks fail, could lose as much $63 billion from expected bank insolvencies over the next three years.

In a mild recession, which some economists say has already arrived, the fund still could lose $43 billion, the study said.

"This nation faces an almost unprecedented situation in having most of its largest banks operating on -- or conceivably over -- the edge of insolvency," the report stated.

Without extra cash, the fund -- at best -- will have $28 billion over the next three years to pay for bank failures, according to the report, commissioned by a House subcommittee on financial institutions.

"The key fact is that many of these banks not only have weak balance sheets by any reasonable standard, but they also are highly exposed to additional deterioration in their capital positions from their significant involvement in high-risk lending."

That leaves the FDIC in much the same position as the savings and loan insurance fund the 1980s -- "without
sufficient resources to pay for its expected caseload of failed" financial institutions, the report said.

The thrift fund eventually collapsed, leaving the government and U.S. taxpayers with a $500 billion bill to bailing out the failed institutions.

William Seidman, chairman of the Federal Deposit Insurance Corp., said this week that the bank fund will lose about $4 billion this year and may need refinancing. At the start of the 1989 the fund had $13 billion.

A spokesman for Seidman said he will comment on the study when he testifies before the House subcommittee Monday.

The report was written by Robert Litan of the Brookings Institution, independent economist Dan Brumbaugh and economist James Barth of Auburn University in Alabama.

The study suggests the fund could be replenished with a large injection of bank capital, or by increasing its line of credit at the Treasury from the current $5 billion to $50 billion.

The report also said banks could pay higher insurance premiums to bolster the fund, although it warned that higher premiums would push more weak banks into insolvency and "irreparably harm the rest of the industry."

The study says federal regulators have been too soft on banks and recommends that they should force shaky banks to strengthen capital by withholding dividends.

It urged Congress to bring badly needed capital into the banking system by allowing corporations to own banks.

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