Speeches & Testimony
Statement to the FDIC Board of Vice Chairman Hoenig on the ANPR for identifying insurance deposit balances for insured depository institutions
April 21, 2015
I support this ANPR. I will not recap all that is addressed within it since staff has done an excellent job of laying out this proposal before the board. I, however, will highlight two matters on which I would encourage the industry and public to comment.
First, a successful insurance company knows its exposure to payouts. This enables it to stay aware of its risks and to address them systematically. While the FDIC is not a private company, it has a public responsibility to best understand its exposure should it be called upon to pay off insured depositors and to resolve a bank that fails. I would like to understand better what risks versus costs are associated with this proposal as it affects commercial banks.
Second, identifying the amount of insured deposits would facilitate a firm’s ability to plan for an orderly bankruptcy under Title I of the Dodd-Frank Act. The ability to readily measure insured deposits should affect a bank’s liquidity position and its flexibility in resolving itself. I would encourage the industry to address this issue and its relative importance in the progress toward successfully implementing Title I.
The ANPR asks multiple questions on the importance of these and related matters, and I look forward to reading comments.