Moving FDIC insurance to an asset-based assessment system: Evidence from the special assessment of 2009

Scott Hein, Timothy W. Koch and Chrislain Nounamo

Journal of Economics and Business, 2012, vol. 64, issue 1, 24-36

Abstract: In the second quarter of 2009, the FDIC imposed a special assessment on insured banks to replenish the deposit insurance fund. While the traditional assessment base for regular deposit insurance premiums was all insured deposits, the special assessment was applied to a bank's total assets minus Tier 1 capital (total liabilities), with the maximum ‘capped’ at 10 basis points of insured deposits. We find that the cap yielded the greatest savings for banks with assets above $10 billion and that the FDIC would have raised a substantially greater amount of funds using holding company adjusted assets or could have applied a lower assessment rate to collect the same amount of proceeds.

Keywords: Financial crisis; Federal Deposit Insurance Corporation; Deposit insurance assessment base; Special assessment; Supervisory Capital Assessment Program; Stress test; Too Big to Fail; Community banks; Deposit insurance fund (DIF); Bank subsidiaries (search for similar items in EconPapers)
JEL-codes: G2 G21 G28 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:64:y:2012:i:1:p:24-36

DOI: 10.1016/j.jeconbus.2011.04.002

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