January 3, 1990
TO: BOARD OF GOVERNORS NO. 1-90
RE: TREASURY STUDY OF FEDERAL DEPOSIT INSURANCE
__________________________________________________________
As directed by the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989, the Department of the Treasury is
conducting a study of the federal deposit insurance system. In
connection with this study, the Department is soliciting comments
from interested persons. Comments are due March 9, 1990.
Attached is a copy of the notice soliciting comments.
Among the items on which the Department is seeking comment are
the purpose of deposit insurance and the concerns it has
engendered (e.g., subsidization of bank activities, "too big to
fail" and encouragement of excessive risks); means for monitoring
and measuring risk; whether to reduce the scope of insurance
coverage; the feasibility of charging risk-based premiums; the
feasibility of alternative deposit insurance systems; and the
interrelationship of deposit insurance and regulation.
The Institute intends to file a comment letter with the
Department. If there are positions you wish the Institute to
consider, please contact the undersigned by February 28, 1990.
Craig S. Tyle
Associate General Counsel
Attachment