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July 1990, No. 35

Based on the accumulated evidence, this Chicago Fed Letter asserts several propositions that should form the basis of future debates on deposit insurance.

Last Updated: 07/31/1990

What We Know About the Deposit Insurance Problem

Herbert L. Baer

When the final bill is in for the 1980s, the difference between assets and liabilities at insolvent banks and thrifts may well turn out to have been as great as $200 billion—over $2,000 per household. The magnitude of the losses has propelled the debate over deposit insurance reform to the top of the political and regulatory agenda.