Insurance Program

The FDIC insures bank and savings association deposits to help ensure stability and public confidence in the U.S. financial system. The Deposit Insurance Fund (DIF) must remain viable to protect insured depositors if an institution fails. When an insured institution fails, the FDIC is responsible for ensuring that the institution’s customers have timely access to their insured deposits. The FDIC maintains sufficient DIF balances by collecting risk-based insurance premiums from insured depository institutions and by pursuing prudent fund investment strategies.

Congress enacted deposit insurance reform legislation in early 2006 that gives the FDIC greater discretion to manage the DIF and allows the FDIC to better price deposit insurance for risk. The new deposit insurance assessment system granted credits to institutions that helped capitalize the funds in the early and mid-1990s, allows the FDIC to assess all institutions regardless of the level of the reserve ratio, and mandates dividends from the fund when it reaches certain levels. In September 2007, the FDIC issued an Advance Notice of Proposed Rulemaking (ANPR), as promised in the temporary dividends rule adopted in 2006, seeking comments on alternative methods for allocating dividends as part of a permanent final rule to implement the dividend requirements of the Federal Deposit Insurance Reform Act. A final rule governing dividends will be issued in 2008.

In 2008, the FDIC will continue to devote significant attention and resources to the identification and analysis of new and emerging risks. As insurer, the FDIC continually evaluates how changes in the economy, financial markets, banking system and individual financial institutions affect the DIF’s adequacy and viability. The FDIC communicates its findings to the industry and the other federal banking agencies ¹ and state authorities through formal and informal channels, including the publication of written analysis of banking industry developments. In recent years, the FDIC has placed increased emphasis on the dissemination of high quality research and analysis through its Center for Financial Research (CFR) and other initiatives. The FDIC’s Risk Analysis Center (RAC) plays a key role in assembling information and ensuring enterprise-wide focus on emerging risks to the fund.

Communication and coordination with the other bank regulatory agencies are top priorities. As the insurer, the FDIC by statute has special examination authority for all insured depository institutions. If significant emerging risks or other serious concerns are identified for an insured depository institution not primarily supervised by the FDIC, the FDIC and the institution's primary federal supervisor² work together to address them.

The FDIC exercises its insurance responsibilities by approving or denying applications for federal deposit insurance from any prospective depository institution. Before granting access to the federal deposit insurance system, the FDIC evaluates the potential risks that an applicant’s business plan poses to the DIF. The FDIC assesses the adequacy of the applicant’s capital, its future earnings potential and the general character of its management. The FDIC also considers the convenience and needs of the community to be served and gathers input from other regulatory authorities. The FDIC seeks to increase public awareness and understanding of deposit insurance rules and coverage. The FDIC reviews whether insured depository institutions make accurate disclosures about uninsured products, provides information to depositors and financial institution staff about the application of deposit insurance rules, and provides tools to assist financial institution employees in interpreting the rules for deposit insurance coverage. The FDIC also responds to deposit insurance questions received from the public and the banking industry.

Increasing globalization and interdependence heighten the potential for financial and economic instability to transcend national geographic boundaries. In coordination with other federal agencies, foreign regulators, deposit insurers and international organizations, the FDIC supports the development and maintenance of effective deposit insurance systems and sound, stable banking systems worldwide through technical assistance, training, consulting services and outreach programs.

¹ In addition to the FDIC, other federal banking agencies are the Board of Governors of the Federal Reserve System (FRB), the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS).
² An institution’s charter and its Federal Reserve System membership status determine which federal banking agency is the institution’s primary federal supervisor.

Indicator and Targets

1. Number of business days after an institution failure that depositors have access to insured funds either through transfer of deposits to the successor insured depository institution or depositor payout
   • Depositors have access to insured funds within one business day if the failure occurs on a Friday.
   • Depositors have access to insured funds within two business days if the failure occurs on any other day of the week.

2. Insured depositor losses resulting from a financial institution failure
   • There are no depositor losses on insured deposits.
   • No appropriated funds are required to pay insured depositors

3. Enhancement of FDIC capabilities to make a deposit insurance determination for a large bank failure
   • Complete rulemaking on Large Bank Deposit Insurance Determination Modernization.

Means and Strategies

Operational Processes (initiatives and strategies):
When an insured institution is identified as a potential failure, the FDIC prepares a plan to handle the possible resolution of the institution. The FDIC begins the resolution process with an assessment of the institution’s assets and liabilities. The FDIC then develops an information package that is used as a marketing tool and is provided to all interested potential assuming institutions. The FDIC solicits proposals from approved bidders to find a buyer for the deposit franchise.

If the federal or state supervisor chooses to close the institution, the FDIC takes control of the failed institution and determines which deposits are insured. Once the FDIC is appointed receiver, it initiates the resolutions process for the failed institution and provides the insured depositors with access to their accounts in one or two business days. The FDIC works with the assuming institution so that the insured deposit accounts are transferred to it as soon as possible.
If no assuming institution is found during the resolution process, the FDIC disburses insured deposit balances directly to customers of the failed institution.

As banking industry practices and technology evolve, the FDIC continues to review and enhance existing plans, processes and systems in response to potential risks that might impact the resolutions process. Comments from the December 2006 ANPR on Large Bank Deposit Insurance Determination Modernization were received and analyzed in early 2007. Based on that analysis, a proposed NPR was developed that specified how deposit account balances would be determined in the event of failure and requiring that certain large, complex insured depository institutions have the capability to post provisional holds on certain accounts and provide a standard data set, if necessary. The NPR was approved by the FDIC’s Board of Directors in December 2007, and the Corporation is currently accepting public comments on it.

Human Resources (staffing and training):
Based on workload fluctuations, staffing requirements will continually be assessed to meet the FDIC’s needs in carrying out its receivership management responsibilities. The FDIC has established policies and procedures to allow for the temporary assignment of resources to meet workload demands and mission responsibilities. The Corporate Employee Program (CEP), which began in 2005, will provide the FDIC with a flexible workforce that is capable of responding quickly to unexpected events or changing workload priorities. This program ensures a continual level of readiness within the workforce by promoting cross-divisional mobility through continuous training and rotational work assignments. The FDIC has also developed strategies to fully leverage other staff resources throughout the Corporation as needed to resolve failed financial institutions. These strategies will be tested through simulations and then employed in future resolutions.

Information Technology:
Technology is critical to improving the efficiency of deposit insurance determinations and payments. The FDIC is in the midst of a multi-year effort to redesign and automate its deposit insurance claims and payment processes. This project, approved in late 2006, will provide an integrated solution that meets the Corporation’s current and future deposit insurance determination needs and will be based on adaptable technology that is compatible with industry standards. In 2008, the Corporation will continue to develop the new Claims Administration System for planned implementation by the end of 2009.

Verification and Validation
The number of business days that it takes for depositors to have access to their insured funds after an institution failure can be verified as follows:

• In the case of a transfer of insured deposits to a successor institution, by comparing the date of failure with the date that the successor insured depository institution opens for business and makes insured funds available to the failed institution’s depositors.
• In the case of a depositor payout, by comparing the date of failure with the date that deposit insurance checks are mailed to depositors or made available for pickup at the premises of the failed institution.

2007 Performance Results
This annual performance goal and performance indicator #1 and its associated performance targets are unchanged from 2007. There were three financial institution failures during 2007, and the FDIC successfully met (and in one case exceeded) the performance targets for this indicator for each failure. Performance indicator #2 and its associated performance targets are new for 2008 and have been added to measure the FDIC’s success in achieving the ultimate desired outcome for the deposit insurance program. Performance indicator #3 is unchanged from 2007, but the associated performance target has been updated to reflect the successful completion of the 2007 performance target.

Strategic Objective 1.2
The FDIC promptly identifies and responds to potential risks to the insurance fund.

Annual Performance Goal 1.2-1
Identify and address risks to the Deposit Insurance Fund.

Indicator and Targets

1. Insurance risks posed by large insured depository institutions
   • Assess the insurance risks in all insured depository institutions and adopt appropriate strategies.

2. Concerns referred for examination or other action
   • Identify and follow up on all material issues raised through offsite review and analysis.

3. Emerging risks to the DIF
   • Identify and analyze existing and emerging areas of risk, including nontraditional and subprime mortgage lending, declines in housing market values, mortgage-related derivatives/collateralized debt obligations (CDOs), hedge fund ownership of insured institutions, commercial real estate lending, international risk, and other financial innovations.
   • Address potential risks from cross-border banking instability through coordinated review of critical issues and, where appropriate, negotiate agreements with key authorities.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC helps maintain the stability of the banking system by proactively identifying financial, operational or systemic risks that may impact the DIF. To perform this critical function, the FDIC continually tracks economic trends and market changes in order to assess their potential impact on insured financial institutions. Risk analysis information enables the FDIC to more effectively maintain and improve models that monitor industry conditions and individual institution risks.

FDIC staff members perform in-depth analyses to identify emerging risks to financial institutions that may pose a risk to the DIF. Staff uses examination information and offsite monitoring tools to analyze potentially high-risk areas, including mortgage lending, complex or illiquid securities, hedge fund ownership of insured financial institutions, derivative activities and commercial real estate lending activities. Significant issues are discussed at the RAC Management Committee and National Risk Committee meetings where any follow-up is determined.

The FDIC’s RAC, which is under the direction and oversight of the FDIC’s National Risk Committee (NRC), utilizes an interdivisional approach to monitoring and analyzing risks to the DIF and to the banking system. The RAC administers an integrated corporate risk analysis process that utilizes information obtained from a wide variety of sources, including examinations and other institutional reviews, as well as internal and external research and analysis. As part of this process, the RAC coordinates the work of the six Regional Risk Committees, resulting in an enhanced understanding of industry conditions and emerging risks and allowing for the dissemination of this information to FDIC managers and staff, other regulators, bankers and the public. The RAC also provides a platform for interdivisional projects that address identified risks that affect the Corporation. Ongoing interdivisional RAC projects on mortgage lending trends and hedge funds are currently underway. Staff envisions conducting similar research on other high-priority risk topics.

In 2008, the FDIC will continue to follow up on issues identified in the NRC’s Collateralized Debt Obligation Project, completed in 2007, including enhanced Call Report coverage of CDOs and problems in the over-the-counter derivatives markets. The Corporation will also continue to participate in an interagency OTC derivatives group, chaired by the New York Federal Reserve Bank, which is studying linkages between the cash and synthetic credit risk markets. In addition, the FDIC will continue in 2008 to pay particular attention to the exposure of insured institutions to risks posed by structured finance and problems in the housing market. It will also assess the extent to which proposed hedge fund ownership of insured institutions raises questions about capital stability or management expertise and is consistent with sound banking practice.

Today, the assets within the U.S. banking system are increasingly concentrated in large insured institutions. The FDIC has assigned dedicated examiners to the six largest financial organizations. They maintain close contact with each institution's primary federal regulator and other FDIC offices to evaluate the institution’s condition, identify potential emerging risks, and assign an FDIC risk rating for each of the six organizations. The FDIC has also established the Large Insured Depository Institution (LIDI) Program to assess and report on emerging risk at all institutions with over $10 billion in assets and other selected institutions. Under this program, regional case managers perform ongoing analysis of emerging risks within each insured institution and assign an appropriate risk rating on a quarterly basis. Case managers also maintain contact with the primary federal regulator for each LIDI institution. The FDIC analyzes data obtained through this program and reports key issues to corporate executives on a regular basis for use in policy and operational discussions.

Information from the Shared National Credit (SNC) program is also integrated into the analysis of emerging risks at large banks. This interagency program provides for annual reviews of certain syndicated loans that total over $20 million and are shared by three or more regulated entities. Using SNC information, FDIC staff identifies industry sector exposures posing a high degree of risk for large banks and analyzes underwriting trends and industry performance trends. This information is used to develop risk briefings and other risk assessment presentations.

Increasing globalization and interdependence heighten the potential for financial and economic instability to transcend geographic boundaries. In response to that risk, the FDIC has stepped up its efforts to promote sound, stable banking systems abroad through the establishment of policies on evolving transnational risks in the financial services industry and bilateral and multilateral relationships with foreign bank supervisors, deposit insurers, and bank resolution authorities. The Corporation established an Office of International Affairs (OIA) in 2006 to focus the FDIC’s international programs and activities toward the goal of helping other countries build strong and effective systems for protecting depositors, supervising financial institutions and resolving failures. OIA plans and conducts training sessions; coordinates technical assistance missions, foreign visits, and bilateral consultations with foreign bank supervisors, deposit insurers, and bank resolution authorities; and participates actively and plays a leadership role in international organizations.

In 2008, the FDIC will continue to monitor the expansion and exposure of insured depository institutions overseas, particularly with respect to emerging markets, and will enhance its collaboration with other primary federal regulators in assessing the risks emanating from these markets. The Interagency Country Exposure Review Committee (ICERC), established by the FDIC, the Federal Reserve Board and the Office of the Comptroller of the Currency (OCC), provides one forum for ensuring consistent treatment of the transfer risk associated with banks’ foreign exposure to both public and private sector entities. In addition, the FDIC will continue to strengthen its working relationships with the global financial sector by establishing protocols for monitoring financial stability and developing contingency plans for the failure of U.S. financial institutions with considerable overseas holdings or foreign financial institutions that could impact the stability of the U.S. economy or banking system. Initial planning activities will be undertaken to establish a framework for conducting an international “table top exercise” focusing on a potential large bank failure. Open-bank supervision issues will be addressed through the FDIC’s ongoing participation in several Basel initiatives, including the Liquidity Working Group, the Definition of Capital subgroup, and studies on complex product valuations and stress testing.

The FDIC also seeks to understand actual and emerging risks through its participation in the Joint Forum’s Working Group on Risk Assessment and Capital. The group is currently working on two papers, Credit Risk Transfer and Cross-Sectoral Review of Group-Wide Identification and Management of Risk Concentrations. The first paper will focus on three issues: (1) whether the instruments/transactions accomplish a clean risk transfer, (2) the degree to which Credit Risk Transfer (CRT) market participants understand the risks involved, and (3) whether CRT activities are leading to undue concentrations of credit risk inside or outside the regulated financial sector. The second paper will explore the extent to which the banking, securities and insurance sectors identify and manage risk concentrations at the conglomerate or group-wide level and how current and emerging risk techniques, including stress testing and scenario analyses, are employed to identify potential concentrations.

Human Resources (staffing and training):
The FDIC employs economists, financial analysts, industry specialists and others who focus on trends and conditions that pose potential financial and operational risks to the banking industry and has incorporated risk-focused examination training into its examination schools. In recognition of the increasing complexity and concentration of risk exposure in large insured institutions and to prepare for the implementation of Basel II, the FDIC is also taking steps to ensure that it has the necessary capabilities within its workforce to identify and address issues within large institutions. The Corporation is developing a large bank training program and continues to recruit personnel with the specialized knowledge and skill sets to analyze large bank operations. The Corporation also continues to enhance its participation in and leadership of international programs promoting global stability.

Information Technology:
The Virtual Supervisory Information on the Net (ViSION) system facilitates numerous supervision activities, including examination tracking, application processing, offsite analysis and monitoring, tracking of formal and informal enforcement actions and banking organization structure. Secure e-mail provides for secure electronic communication of confidential supervisory information with state banking departments and other federal banking agencies. The FDIC also has access to specialized databases of mortgage lending information and market data on commercial real estate to carry out activities related to this goal.

Verification and Validation
Potentially heightened insurance risks identified through the Dedicated Examiner, LIDI and SNC programs are reported to FDIC senior executives, who determine an appropriate course of action. Follow-up activities are tracked through established reporting processes. Analysis of emerging risks and trends in the financial industry or economy is reviewed by the RAC, submitted to the NRC, reviewed by the FDIC Board of Directors through periodic risk briefings, and communicated internally and externally through numerous FDIC publications and written reports.

2007 Performance Results
This annual performance goal and its associated performance indicators and targets are unchanged from 2007, except for the inclusion of additional risks in the first performance target for performance indicator #3. In 2007, the FDIC successfully met all of the performance targets. For additional information on how these performance targets were met, please see the FDIC’s 2007 Annual Report.

Annual Performance Goal 1.2-2
Disseminate data and analyses on issues and risks affecting the financial services industry to bankers, supervisors, the public and other stakeholders.

Indicator and Targets
Scope and timeliness of information dissemination on identified or potential issues and risks.

• Disseminate results of research and analyses in a timely manner through regular publications, ad hoc reports and other mean.
• Undertake industry outreach activities to inform bankers and other stakeholders about current trends, concerns and other available FDIC resources.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC maintains a vigorous research and publications program on issues and topics of importance to the banking industry. Much of this research is conducted in collaboration with the academic community through the Center for Financial Research (CFR). Research findings are disseminated through CFR working papers, articles in professional journals and presentations at conferences and other events. The FDIC also disseminates information and analyses on industry risks through periodic reports, publications (e.g., FDIC Quarterly), Financial Institution Letters and participation in industry events and other outreach activities.

The FDIC conducts numerous outreach sessions several times yearly throughout the country. The FDIC works with local banking groups to present Directors College outreach sessions to local bank board members. During these sessions, information on current risks, new regulations and other timely data are communicated to bank directors. Banker roundtable events are conducted by local FDIC offices nationwide to provide a forum for bankers to receive guidance and raise questions about new regulatory guidance or emerging risks.

Human Resources (staffing and training):
The FDIC employs economists, financial analysts and other staff members who monitor risks within the banking industry and communicate those risks to other regulators, the industry, the public and other stakeholders through a variety of media and forums. In 2008, the FDIC will continue to increase the number of staff with quantitative risk-analysis and financial risk modeling capabilities. In addition, outside scholars participate in the Corporation’s risk analysis program, and risk-focused examination training has been incorporated into the FDIC’s examination schools. The FDIC also maintains a cadre of staff members throughout the country to conduct banker outreach sessions.

Information Technology:
The FDIC’s website (www.FDIC.gov) is a centralized source of information on FDIC research and analysis of potential areas of risk for the industry, the public and other regulators. In addition, the use of open data exchange standards (known as “eXtensible Business Reporting Language,” or XBRL) provides faster access to financial institution information for all users of the data, including financial institutions, bank regulators and the public.

Verification and Validation
Timely analyses of banking industry risks are included in regular publications or as ad hoc reports. Industry outreach activities aimed at the banking community and industry trade groups promote discussion of current trends and concerns, and inform bankers about available FDIC resources. Publications and outreach events are documented through established reporting processes.

2007 Performance Results
This annual performance goal and its associated performance indicator and targets are unchanged from 2007. In 2007, the FDIC met each of these targets through the CFR’s program of research, publications, and conferences and through the FDIC’s regular publications program, focusing on bank information and current industry conditions, risks and trends. These publications include FDIC Quarterly, and the quarterly FDIC State Profiles.

Strategic Objective 1.3
The deposit insurance funds and system remain viable.

Annual Performance Goal 1.3-1
Maintain and improve the deposit insurance system.

Indicator and Targets

1. Implementation of deposit insurance reform
   • Review the effectiveness of the new pricing regulations that were adopted to implement the reform legislation.
   • Enhance the additional risk measures used to adjust assessment rates for large institutions.
   • Develop a final rule on a permanent dividend system.


2. Loss reserves
   • Ensure the effectiveness of the reserving methodology by applying sophisticated
     analytical techniques to review variances between projected losses and actual losses, and by adjusting the methodology accordingly.


3. Fund adequacy
• Set assessment rates to maintain the insurance fund reserve ratio between 1.15 and 1.50 percent of estimated insured deposits.

Means and Strategies

Operational Processes (initiatives and strategies):
In 2008, the FDIC will prepare an analysis of the effectiveness of new pricing regulations. In 2007, staff developed an ANPR on dividends for review and approval by the FDIC Board of Directors. The FDIC published an ANPR on implementation of a permanent dividend system in the Federal Register in September 2007. Comments on the ANPR will be considered when drafting an NPR on dividends, to be published in 2008. A final rule will be issued by year end 2008.

During 2008, the FDIC will evaluate qualitative loss severity measures for potential adjustment of large-bank assessment rates. If deemed appropriate, qualitative loss severity information will be incorporated into large-bank pricing discretion determinations.

The FDIC’s Financial Risk Committee (FRC) develops quarterly failure projections and loss estimates to establish contingent loss reserves for the insurance fund. The FRC keeps pace with changing techniques and methodologies used to analyze the nature of risk exposure, including scenario analysis and stress testing. Models that forecast failures and failure resolution costs are maintained and enhanced, as necessary. The FRC regularly reviews adverse events to identify lessons or implications for monitoring and addressing risks. Supervisory and other information about large institutions is incorporated into the FRC’s recommendations regarding insurance related business decisions. The FRC consults with the other federal banking agencies in its deliberations.

Based on an analysis of projected failed bank assets and other pertinent information, the FRC recommends to the Chief Financial Officer the level of the contingent loss reserve for the DIF, as determined by the FDIC’s reserving methodology. FDIC staff also uses the information provided by the FRC on projected insurance losses as one factor in determining the level of assessment revenue necessary to maintain adequate funding in the DIF. Projected insurance losses, as well as projections of investment revenue, operating expenses and insured deposit growth, are key elements in estimating assessment revenue needs.

Human Resources (staffing and training):
Additional staff will be recruited in 2008 to administer and perform the analytical work associated with deposit insurance pricing, including a review of the effectiveness of the new regulations. In addition, the FDIC will continue to add staff to its banking and economic research program, and to expand its ties to the academic community to broaden the information and analytical perspectives available to the Corporation as steward of the DIF. Outside scholars will be actively engaged in producing relevant research through CFR-sponsored relationships and activities.

Information Technology:
A total of 48 information systems were impacted by the merger of the BIF and SAIF and changes in deposit insurance coverage. Applications affected by the funds merger and deposit insurance coverage changes were successfully modified and tested in 2007. Modifications and enhancements to existing systems to fully implement deposit insurance reform will continue in 2008. In addition, development of a dividends processing system will begin in 2008.

Verification and Validation
FDIC staff review systems to ensure that they are functioning properly prior to issuing the quarterly assessment invoices. In 2008, business processes related to large bank insurance pricing adjustments will be developed and reviewed by the FDIC’s Office of Enterprise Risk Management.

To ensure that the Risk Related Premium System (RRPS) identifies higher risk institutions and appropriately assesses higher insurance premiums, the FDIC reviews, on an on-going basis, the assessment history of all failed insured depository institutions and determines whether the system is working adequately.

The Government Accountability Office reviews the methodology used to determine the contingent loss reserve annually. In 2008, the FRC will again conduct a semiannual review of the effectiveness of the contingent loss reserve methodology through an analysis of the variance between projected and any actual losses.

In 2007, FDIC systems and business procedures were developed or modified to implement the new risk-based assessment system. The FDIC issued Financial Institution Letters explaining the new methodology and procedures. FDIC staff conducted outreach activities through industry trade groups and other appropriate venues. FDIC staff reviewed systems to ensure that they were functioning properly prior to issuing the first quarterly assessment invoices. In addition, related business processes were reviewed by the FDIC’s Office of Enterprise Risk Management.

2007 Performance Results
This annual performance goal, as well as the three performance indicators and the performance targets for performance indicators #2 and #3, are unchanged from 2007. The performance targets for performance indicator #1 have been revised to reflect the substantial progress that has been made in implementing deposit insurance reform. In 2006, the FDIC increased the deposit insurance coverage limit for retirement accounts to $250,000; merged the Bank Insurance and Savings Association Insurance Funds into the new DIF; developed a new risk-based deposit insurance pricing system and established new assessment rates that were effective in 2007; established a new assessment credits system; and adopted a temporary system for any required payment of dividends from the DIF. The updated performance targets for 2008 focus on implementation and evaluation of the new deposit insurance pricing system and completion of rulemaking activities to establish a permanent dividend system.

Regarding performance indicator #2 and its associated performance target, the FDIC performed reviews in 2007, as it had in prior years, to confirm the effectiveness of its reserving methodology, and it will continue to undertake such reviews in 2008. Regarding performance indicator #3 and its associated performance target, the FDIC set the target Designated Reserve Ratio (DRR) for the DIF at 1.25 basis points for 2007 and again for 2008 and established new assessment rates for insured institutions, effective in 2007, that are designed to achieve the DRR during 2009. The Board of Directors will establish the target DRR annually, as required by law, and will consider in 2008 and future years whether changes are needed to the assessment rates it has approved. 

Annual Performance Goal 1.3-2
Provide educational information to insured depository institutions and their customers to help them understand the rules for determining the amount of insurance coverage on deposit accounts.

Indicator and Targets

1. Timeliness of responses to insurance coverage inquiries
   • Respond to 90 percent of inquiries from consumers and bankers about FDIC deposit insurance coverage within time frames established by policy.

2. Educational initiatives and outreach events for consumers and bankers
   • Conduct at least three sets of the Deposit Insurance Seminar Series for bankers.
   • Assess the feasibility of (and, if feasible, define the requirements for) a consolidated Electronic Deposit Insurance Estimator (EDIE) application for bankers and consumers (to be developed in 2009).
   • Conduct outreach events and activities to support a deposit insurance education program that features an FDIC 75th anniversary theme.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC uses a variety of means to educate insured financial institutions and depositors about FDIC deposit insurance coverage. In addition to conducting seminars for bank employees, the FDIC encourages the dissemination of educational information through the banking industry and the media. The FDIC updated its various deposit insurance educational tools and publications in 2006/2007 to reflect changes made as part of deposit insurance reform. The FDIC works with insured financial institutions to encourage them to use these tools and to make the FDIC’s publications available to bank employees and customers. The FDIC also operates a toll-free call center (877-ASK-FDIC) staffed by deposit insurance specialists, maintains educational resources on the FDIC’s website (www.FDIC.gov), publishes articles on insurance coverage rules in FDIC Consumer News (a quarterly newsletter for consumers published by the FDIC), and works to raise awareness about deposit insurance coverage through the national and regional news media..

Human Resources (staffing and training):
Staffing and training needs are reviewed on an ongoing basis to ensure that the resources supporting the planned 2008 deposit insurance educational initiative are adequate and that employees possess the skills and knowledge to implement this program effectively and successfully.

Information Technology:
The FDIC manages the receipt of and response to banker and public inquiries about the FDIC’s deposit insurance program using the Specialized Tracking and Reporting System (STARS). In 2008, the FDIC will conduct a feasibility study to evaluate whether to consolidate the two existing versions of the Electronic Deposit Insurance Estimator (EDIE) – that is, Online EDIE for Consumers and EDIE for Bankers – into one enhanced application. The FDIC also will continue to use teleconferencing technology and the internet to more efficiently reach a large audience of financial institution employees and to deliver both deposit insurance and educational tools and materials to the banking community and the public.

Verification and Validation
Progress in meeting the performance targets for this annual performance goal will be tracked through established reporting processes.

2006 Performance Results
This annual performance goal as well as performance indicator #1 and its associated performance target are unchanged from 2007. In 2007, the FDIC exceeded that performance target by responding to 98 percent of all inquiries from bankers and consumers related to deposit insurance coverage within target time frames, despite a more than 40 percent increase in the number of such inquiries compared to the three previous years. The Corporation also met all of its other 2007 performance targets for this goal. Performance indicator #2 and its associated performance targets for 2008 are new.

Annual Performance Goal 1.3-3
Expand and strengthen the FDIC’s participation and leadership role in providing technical guidance, training, consulting services and information to international governmental banking and deposit insurance organizations.

Indicator and Targets
Scope of information sharing and assistance available to international governmental bank regulatory and deposit insurance entities.

• Undertake outreach activities to inform and train foreign bank regulators and deposit insurers.
• Foster strong relationships with international banking regulators and associations that promote sound banking supervision and regulation, failure resolution and deposit insurance practices.

Means and Strategies

Operational Processes (initiatives and strategies):
As noted previously, increasing globalization and interdependence heighten the potential for financial and economic instability to transcend geographic boundaries, and the FDIC has stepped up its efforts to promote sound, stable banking systems abroad. Accordingly, the FDIC pursues a variety of activities that are intended to promote cooperative relationships and information sharing with international deposit insurance and bank regulatory entities and foreign governmental banking regulators. OIA, which was established in 2006, plans and conducts training sessions; coordinates technical assistance missions, foreign visits, and bilateral consultations with foreign bank supervisors, deposit insurers and bank resolution authorities; participates actively and plays a leadership role in international organizations; and performs other related activities in support of this annual performance goal.

Human Resources (staffing and training):
The FDIC will ensure the appropriate staffing level to support its international programs and activities, and it will identify detail opportunities for selected FDIC employees to provide technical assistance to foreign banking-related government entities. The FDIC will also evaluate other opportunities for employee details to support the international program and enhance the FDIC’s leadership role in regional and international bank supervision, failure resolution, and deposit insurance groups.

Information Technology:
Information about international governmental bank regulatory or deposit insurance activities and the FDIC’s international program will be communicated through OIA’s website.

Verification and Validation
Achievement of this annual performance goal will be demonstrated through FDIC-enhanced leadership roles in key international organizations. Progress in meeting this annual goal will be tracked by the FDIC’s International Affairs Working Group through established reporting processes.

2007 Performance Results
This annual performance goal and its associated performance indicator and targets are essentially unchanged from 2007. The FDIC successfully met both performance targets in 2007. During 2007, FDIC outreach activities continued to foster strong relationships with international governmental banking regulators and associations with the FDIC assuming several leadership roles in the international community. Most notably, the FDIC’s Vice Chairman was elected as President of the International Association of Deposit Insurers and Chair of its Executive Council; the Director, OIA, assumed the North American Region Board member position with the Association of Supervisors of Banks in the Americas; and several senior FDIC executives continued to participate on committees and working groups established by the Basel Committee for Bank Supervision. Other accomplishments related to the 2007 performance targets are explained in the FDIC’s 2007 Annual Report.