Loss Sharing Rules for Bank Holding Companies: An Assessment of the Federal Reserve's Source-of-Strength Policy and the FDIC's Cross Guarantee Authority

48 Pages Posted: 7 Dec 2007

See all articles by Christine Bradley

Christine Bradley

U.S. Federal Deposit Insurance Corporation (FDIC)

Kenneth D. Jones

State Street Corporation

Multiple version iconThere are 2 versions of this paper

Date Written: December 2007

Abstract

In this article, we critically examine two policies designed to protect the deposit insurance funds - the Federal Reserve Board's source-of-strength policy and the FDIC's cross-guarantee authority. We discuss why each of the policies was adopted and how effective each has been in practice since its implementation. We then evaluate the future application and usefulness of the two policies in light of the structural changes that have resulted from industry consolidation and the financial modernization of the 1990s.

Keywords: source of strength, cross-guarantees, deposit insurance

JEL Classification: G2

Suggested Citation

Bradley, Christine and Jones, Kenneth D., Loss Sharing Rules for Bank Holding Companies: An Assessment of the Federal Reserve's Source-of-Strength Policy and the FDIC's Cross Guarantee Authority (December 2007). Available at SSRN: https://ssrn.com/abstract=1055141 or http://dx.doi.org/10.2139/ssrn.1055141

Christine Bradley

U.S. Federal Deposit Insurance Corporation (FDIC) ( email )

550 17th Street NW
Washington, DC 20429
United States

Kenneth D. Jones (Contact Author)

State Street Corporation ( email )

1 Lincoln Street
Boston, MA 02111
United States
617-662-0370 (Phone)

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