March 9, 1990
TO: BOARD OF GOVERNORS NO. 15-90
RE: INSTITUTE COMMENT LETTER ON DEPOSIT INSURANCE STUDY
__________________________________________________________
As we previously informed you, the Department of Treasury
has been soliciting comments in connection with its study of the
federal deposit insurance system. (See Memorandum to Board of
Governors No. 1-90, dated January 3, 1990.) Attached is a copy
of the Institute's comment letter. In the letter, the Institute
recommends adoption of the "narrow bank" proposal, in accordance
with the position adopted by the Board of Governors at its
January meeting. Under the narrow bank proposal, banks
affiliated with firms engaged in securities related activities
would be entitled to federal deposit insurance only if their
portfolios were limited to safe, highly liquid securities.
Craig S. Tyle
Associate General Counsel
Attachment