The 1980 Increase to $100,000
- An inflation adjustment would have raised deposit insurance coverage to $60,000.
- Why $100,000?
- Response to interest rates and changes in the financial industry
- Draw funds into thrifts
- Some have cited the increased coverage as a contributing factor to the S&L crisis.
- Additional liabilities increased resolution costs.
- Exacerbated “Moral Hazard” problem
- Removal of Reg Q ceilings
Source: FDIC,” History of the Eighties”, 1997