|FOR IMMEDIATE RELEASE:||
CONTACT: Jesse Jacobs 202-224-4524
|Monday, July 30, 2001||
Bob Martin (Johnson) (202) 224-1643
Frank Scanlan (Johnson) (202) 224-1770
Senator Tim Johnson, (D-SD), the Chairman of the Financial Institutions Subcommittee, will hold the first in a series of hearings examining comprehensive deposit insurance reform. Johnson has expressed concern about the pro-cyclical nature of FDIC's coverage system. Currently, 92% of insured depository institutions pay nothing for insurance coverage. Institutions would be assessed very high premiums, however, if the current insurance fund were to drop below a 1.25% reserve ratio, something that could happen in the event of worsening economic conditions.
Johnson said he expects the hearings to address the related concern of insured deposit limits. He is also concerned that a recent surge in insured deposits has caused the current fund ratios to drop, raising the threat that banks and thrifts could be forced to ante up for insurance premiums if the trend continues.
The hearing on "Comprehensive Deposit Insurance Reform: Responses to the FDIC Recommendations for Reform" will take place:
THURSDAY, AUGUST 2, 2001
538 DIRKSEN SENATE OFFICE BUILDING
Scheduled to testify before the Subcommittee are: