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FDICIA's Prompt Corrective Action Provisions

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Following passage of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which addressed the insolvency of the Federal Savings and Loan Insurance Corporation's deposit insurance fund, policymakers turned their attention toward heading off a similar collapse of the Bank Insurance Fund (BIF). After months of wrangling, Congress forwarded the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) to the White House last November 27. As President Bush signed the bill into law a few weeks later, the BIF was roughly $7 billion in the red — its first deficit since the 1930s.

Following passage of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, which addressed the insolvency of the Federal Savings and Loan Insurance Corporation's deposit insurance fund, policymakers turned their attention toward heading off a similar collapse of the Bank Insurance Fund (BIF). After months of wrangling, Congress forwarded the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA) to the White House last November 27. As President Bush signed the bill into law a few weeks later, the BIF was roughly $7 billion in the red — its first deficit since the 1930s.


Suggested citation: Pike, Christopher J., and James B. Thomson, 1992. "FDICIA's Prompt Corrective Action Provisions," Federal Reserve Bank of Cleveland, Economic Commentary, 09.01.1992.

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