The federal deposit insurance fund that didn't put a bite on U.S. taxpayers
AbstractUnlike the Federal Savings and Loan Insurance Corporation and the Bank Insurance Fund, the National Credit Union Share Insurance Fund (NCUSIF) entered the 1990s in a state of accounting solvency. This paper develops evidence to show the more important fact that NCUSIF remained solvent in a market-value sense as well. Differences in institutional product lines and risk-taking opportunities between credit unions and banks and thrifts are not consequential enough to explain the differences in their funds' health. This paper explains how differences in decisionmaking environments made managerial and regulatory risk-taking incentives in the credit-union industry diverge substantially from those governing banks and S&Ls. The differences in incentive structure support the hypothesis that private coinsurance could lessen taxpayer loss exposure elsewhere in the federal deposit insurance system.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Banking & Finance.
Volume (Year): 20 (1996)
Issue (Month): 8 (September)
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Web page: http://www.elsevier.com/locate/jbf
Other versions of this item:
- Edward J. Kane & Robert Hendershott, 1994. "The Federal Deposit Insurance Fund That Didn't Put A Bite on U.S. Tax Payers," NBER Working Papers 4648, National Bureau of Economic Research, Inc.
- G2 - Financial Economics - - Financial Institutions and Services
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- Demirguc-Kunt, Asl' & Kane, Edward J., 2001. "Depositinsurance around the globe : where does it work?," Policy Research Working Paper Series 2679, The World Bank.
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