3 "Deposit insurance forces the giv. To monitor DI due to large contingent liability, leads to FDIC to have powers to force bank mangers to limit risk. 4 "Onsite exams and regular reporting requirements help ensure compliance and maintenance of sound banking practices.
12 3 thrift institutions,.
1-Savings Ass "residential mortgages,insured by the Savings Ass insurance fund, called savings and loans, led to negative interest spread & negative net interest margins due to surge in interest rates for deposits, loans locked in low rate, depositors withdrew money from savings and deposit into unregulated money market funds sinceceilings were usually set rates of 5.25-5.5%. 2 major acts came from this, -1, Depository Insitutions Deregulation and Monetary Control Act of 80,-2, the GarnSt Germain Depository Institution Act of 82 they expacnded the deposit-taking and asset investment power of Savings Ass.
2-Savings Banks, east coast and new England states, insured by FDICunder bank insurance fund, lg concentration of residential mortgages, commercial loans, corporate bonds, and corporate stock, greater freedom , rely on deposits than savings ass, fewer borrowed funds,.
Regulators of Savings Institutions: The office of Thrift supervision- in 89 under FIRREA, charters and examines all institutions and supervises holding comp of savings institutions., FDIC-oversees SAIF & BIF( insurance coverage for savings ass, insurance converage for savings banks).
3-Crdit Unions, non profit deposits, members, higher level of equity than other banks, growth is not goal, insured by National Credit Union Insurance fund,.
13 DI's Why evaluate? Stockholders, depositors use the info to decide which DI stock to buy, unique type of assets and liabilities they hold, special services they perform, level of regulatory attention they receive. Reports: Condition- balance sheet of bank with info at a single pt in time, Income- income statement of bank w/ revenues, expenses, net profit or loss and dividends over a period of time.
