Mr. Chairman, thank you for holding this important and timely hearing.
Deposit insurance reform has been the center of a great deal of Congressional consideration and discussion as of late. Among the key issues in this debate are whether general deposit coverage limits should be increased – and if so, by how much – or whether they should simply be indexed.
The questions surround the adequacy of the current coverage limit and whether the value of that coverage has eroded since 1980, the last time it was raised.
In my mind the most important element of this debate will be whether increasing the coverage will provide a net benefit that provides an incentive for people to save more.
My guess is few, if any, consumers are aware that this debate is ongoing, and unless pressed for an answer, fewer would have an actual opinion on the matter. Little information exists that can provide us with an accurate portrayal of consumer sentiment on this subject.
There are other items of importance to this debate aside from the question of increasing the coverage limits.
Whether we should increase coverage for individual retirement accounts and municipal deposits; whether we should merge the BIF and the SAIF; how much flexibility the FDIC should have in setting the merged fund's designated reserve ratio; and whether the FDIC should be allowed to assess premiums on all institutions are all important considerations for us to undertake. There seems to be a growing consensus to act on most of these points.
For those of us still undecided on the merits of various facets of this debate, this hearing will give us a unique opportunity to have an open, frank discussion of these important issues. Mr. Chairman, you have afforded us that opportunity by convening a hearing with a most distinguished panel.
I welcome all of our witnesses and look forward to their testimony and to an engaging discussion.
Thank you, Mr. Chairman.