The Major Supervisory Initiatives Post-Fdicia: Are They Based on the Goals of Pca? Should They Be?

FRB of Atlanta Working Paper No. 2002-31

50 Pages Posted: 30 Apr 2003

See all articles by Robert Eisenbeis Eisenbeis

Robert Eisenbeis Eisenbeis

Independent

Larry D. Wall

Federal Reserve Bank of Atlanta - Research Department

Multiple version iconThere are 2 versions of this paper

Date Written: December 2002

Abstract

The prompt corrective action provisions in FDICIA 1991 provide the supervisors with an unambiguous goal: "to resolve the problems of insured depository institutions at the least possible long-term cost to the deposit insurance fund." Yet performance of the regulators in achieving this goal has been lacking in that substantial losses continue to be imposed on the insurance funds when banks fail. Is PCA misguided, or are there incentive defects in the law and how the requirements are being administered? This paper analyzes these issues in the context of recent proposals to reform the deposit insurance system.

Keywords: deposit insurance, bank supervision, capital adequacy regulation

JEL Classification: G2, L5

Suggested Citation

Eisenbeis, Robert Eisenbeis and Wall, Larry D., The Major Supervisory Initiatives Post-Fdicia: Are They Based on the Goals of Pca? Should They Be? (December 2002). FRB of Atlanta Working Paper No. 2002-31. Available at SSRN: https://ssrn.com/abstract=370100 or http://dx.doi.org/10.2139/ssrn.370100

Robert Eisenbeis Eisenbeis

Independent ( email )

No Address Available

Larry D. Wall (Contact Author)

Federal Reserve Bank of Atlanta - Research Department ( email )

1000 Peachtree Street, NE
Atlanta, GA 30309-4470
United States
404-498-8937 (Phone)
404-498-8956 (Fax)

HOME PAGE: http://www.frbatlanta.org/econ_rd/bios/wall.htm

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