"The Federal Deposit Insurance Fund That Didn't Put A Bite on U.S. Tax Payers" [report]

Edward Kane, Robert Hendershott
1994 unpublished
Unlike the Federal Savings and Loan Insurance Corporation and the Bank Insurance Fund, the National Credit Union Share Insurance Fund (NCUSIF) entered the 1990s in a state of accounting solvency. This paper develops evidence to show the more important fact that NCUSIF remained solvent in a market-value sense as well. Differences in institutional product lines and risk-taking opportunities between credit unions and banks and thrifts are not consequential enough to explain the differences in
more » ... differences in their funds' health. This paper explains how differences in decisionmaking environments made managerial and regulatory risk-taking incentives in the credit-union industry diverge substantially from those governing banks and S&Ls. The differences in incentive mucture support the hypothesis that private coinsurance could lessen taxpayer loss exposure elsewhere in the federal deposit insurance system.
doi:10.3386/w4648 fatcat:6vaph3eh5fgwjbcy4t3kqdsseq