Will legislated early intervention prevent the next banking crisis?

Joe Peek and Eric Rosengren ()

No 96-5, Working Papers from Federal Reserve Bank of Boston

Abstract: A key provision of the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) was prompt corrective action (PCA). PCA emphasized early intervention by bank supervisors and was intended to limit forbearance by making supervisory intervention more timely and less discretionary. However, PCA legislation appears to have been oversold. Had PCA been in place during the recent banking crisis in New England, it would have had little, if any, effect. Relative to actions taken by supervisors, PCA provisions would not have imposed more severe restrictions on banks, intervened earlier, or intervened in problem banks that would otherwise have been missed.

Keywords: Banks and banking; Federal Deposit Insurance Corporation Improvement Act of 1991; Financial crises - Asia (search for similar items in EconPapers)
Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published in Southern Economic Journal (July 1997): 268-80.

Downloads: (external link)
http://www.bostonfed.org/economic/wp/wp1996/wp96_5.htm (text/html)
http://www.bostonfed.org/economic/wp/wp1996/wp96_5.pdf (application/pdf)

Related works:
Journal Article: Will Legislated Early Intervention Prevent the Next Banking Crisis? (1997)
Working Paper: Will Legislated Early Intervention Prevent the Next Banking Crisis? (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbwp:96-5

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().