Meet the Author

O. Emre Ergungor |

Assistant Vice President and Economist

O. Emre Ergungor

Emre Ergungor is an assistant vice president and economist in the Research Department at the Federal Reserve Bank of Cleveland. He is responsible for the household finance section of the Banking Policy and Analysis Group, which conducts research on regulatory policy and banking issues and provides advice on financial policy formulation. He also oversees the Federal Reserve System’s Muni Financial Monitoring Team (FMT), which monitors municipal bond markets, state and local funding, and public pension funds. Dr. Ergungor specializes in research related to financial intermediation, information economics, housing policy, and credit access in low- to moderate-income households.

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Economic Trends

FDIC Funds

by O. Emre Ergungor and Cara Stepanczuk

FDIC-insured deposits grew 6.7 percent in 2006. The fund’s reserve-to-deposit ratio fell to 1.21 percent, partly because insured deposits increased after the retirement account ceiling was raised from $100,000 to $250,000 in April. The reserve-to-deposit ratio remained in the target range, which changed to 1.15 percent–1.5 percent that month.

Bank failures since 1995 have been miniscule in terms of both the number of institutions and their total assets. No FDIC-insured institution failed in 2006; in fact, the fourth quarter of 2006 was the tenth consecutive quarter without any failures, the longest such period in the history of federal deposit insurance.

By the end of 2006, the number of problem institutions (those with substandard examination ratings) had dropped to 50, the lowest in the 36 years for which data are available. However, their total assets increased from $7 billion to $8.3 billion over the same period. Still, the low number of problem institutions and the low value of their assets suggest that the FDIC’s losses will remain low in the near future.