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SAIF Policy Options

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As part of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989, Congress mandated a minimum coverage ratio of $1.25 of insurance reserves per $100 of insured deposits for the Bank Insurance Fund (BIF) and Savings Association Insurance Fund (SAIF). The Federal Deposit Insurance Corporation (FDIC), which administers both funds, estimates that the BIF's ratio will reach the mandated 125-basis-point coverage ratio by midyear and that as a result, banks and other BIF-insured depositories are likely to see their average deposit insurance assessment fall from 24 cents per $100 of domestic deposits to 4 cents by the close of 1995.

As part of the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989, Congress mandated a minimum coverage ratio of $1.25 of insurance reserves per $100 of insured deposits for the Bank Insurance Fund (BIF) and Savings Association Insurance Fund (SAIF). The Federal Deposit Insurance Corporation (FDIC), which administers both funds, estimates that the BIF's ratio will reach the mandated 125-basis-point coverage ratio by midyear and that as a result, banks and other BIF-insured depositories are likely to see their average deposit insurance assessment fall from 24 cents per $100 of domestic deposits to 4 cents by the close of 1995.


Suggested citation: Osterberg, William P., and James B. Thomson, 1995. "SAIF Policy Options," Federal Reserve Bank of Cleveland, Economic Commentary, 06.01.1995.

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