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.
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Publisher Info
Paper provided by Federal Reserve Bank of Boston in its series Working Papers with number
96-5.
Length: Date of creation: 1996 Date of revision: Publication status: Published in Southern Economic Journal (July 1997): 268-80. Handle: RePEc:fip:fedbwp:96-5
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