FDIC losses in bank failures: has FDICIA made a difference?(Federal Deposit Insurance Corporation)(FDIC Improvement Act)

From: Economic Perspectives | Date: September 22, 2004| Author: Kaufman, George G. | Copyright information

Introduction and summary

Banks are generally failed and placed in receivership when the value of their assets declines below the value of their deposits and other debt, so that the value of their capital (net worth) becomes negative. The losses exceed the ability of the stockholders to absorb them. As a result, some of their creditors, and in the United States also the Federal Deposit Insurance Corporation (FDIC), which stands in the shoes of, at minimum, the insured dep...

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