The 100 Grand Illusion

...The FDIC's list of 1,100 "problem" banks (though down from its 1987 peak) now hovers at five times its early-eighties level...

...Absorbing these hits in the past two years has stuck the FDIC insurance fund with its first losses ever and left the fund holding a historic low of 70 cents for every $100 of insured deposits...

...It's not only congressmen who know how to be cowards, however...

...After that, coverage would operate on a sliding scale, with perhaps 50 percent of the next $50,000 covered, and 25 percent of all amounts higher...

...Going this route involves upgrading thrift capital standards and assuring that sinking thrifts get closed fast before the Ponzi temptation takes over...

...Like Brazil's new President Collor—who's just frozen most Brazilian bank accounts to curb inflation— you'd think pols here would see that you've got considerable freedom to move on financial measures when only a few voters have enough money to be affected by them...

...Brokered funds: In theory, "troubled institutions" that don't meet the new capital standards can no longer bid for brokered money to fund further growth...

...When interest rates skyrocketed, the value of these old mortgages plummeted...

...True, the FDIC has a much better record of supervision than the notoriously lax Home Loan Bank Board...

...To Brady's credit, the idea was both direct and fair, since depositors are also the ones who benefit from extra-high interest rates when federally insured banks bid for their deposits...

...But you can bet your congressman's do...

...Maybe so...

...Meanwhile, the banks' consumer business got squeezed as companies like Chrysler, Ford, and GM' formed finance subsidiaries to make cheap credit an attractive part of their marketing strategies...

...Banks descending further into the last capital tranche would face mandatory FDIC takeover and either merger or liquidation—before losses (and thus taxpayer exposure) could mount...

...They like to focus on misdeeds—it's much easier to tell a morality story...

...Fernand St...

...Until something happens that changes that stereotype, the deposit insurance angle won't catch on...

...Except that the government didn't put Ponzi in business...

...The story of how the Federal Home Loan Bank Board and gaggles of willing legislators were bamboozled by these insolvent thrifts into broadening their investment powers and letting them stay open is familiar...

...What the IBAA is really concerned with isn't losing individuals' deposits but the ability to offer good-as-gold accounts for small business customers...

...With feel-good politics still the reigning fashion in Washington, there aren't any takers...

...But such ambitions faded, given the three weeks they had to put together a plan...

...The first step is to introduce some form of market-value accounting, so that the now commonly used methods masking dramatic fluctuations in asset values can no longer hide the truth about solvency from regulators...

...Agencies that regulate banks exist largely because of this Ponzi-style risk...

...They've written off $75 billion in bad loans since 1986—when the economy has been strong—compared with just $28 billion over the entire 1948-81 period...

...The shocking result...

...The result was a series of regional cartels in which even comatose bankers were sure to be moneymakers...

...Thrift owners under this socalled "get tough" approach have to put only $3 from Up to one quarter of the $3 trillion in the U.S...

...Gobs of Third World debt sit like time bombs on bank balance sheets...

...Bank depositors fled in droves, removing the captive source of funds that had kept banks fat and happy for decades...

...The head-on option got jettisoned at the outset...

...They're very personable, they're very earnest," says one aide...

...There may have been less reason to worry about a blank insurance check in the old days, when banks faced little competition and earned stable profits...

...At first blush it seems strange that the politics of untouchability apply here as they do to Social Security...

...When they had a chance, they didn't propose anything," Bartley says...

...Past experience suggests that in a recession, bank write-offs will double, with losses concentrated in 20 percent of the industry...

...Experts say that even a mild recession could now bankrupt the fund completely—and then guess who's on the hook again...

...in any event, the difficulty of identifying the relevant measure perfectly is hardly an excuse for sticking with the irrelevant one...

...First, commercial banks woke up to find their dependable monopolies threatened at every turn...

...Insured deposits should be invested only in low-risk assets (like T-bills) that can be readily market-valued, so that the solvency of insured funds can be monitored daily...

...And in any event, the alternative (eventually legislated) of charging higher insurance premiums to banks gets passed through to the depositors anyway...

...There was never one minute's consideration or hearing on that increase," says Gonzalez...

...As market rates bumped up against the ceilings that banks could legally offer, investment management firms launched money market funds promising more...

...Another, Columbia Savings of California, used the money attracted through Uncle Sam's smiling guarantee to bet the farm on Michael Milken's junk bonds until times got tough...

...Competition between banks was deterred by slapping ceilings on the interest rates they could offer to compete for funds...

...It was clear," says Michael Bradfield, former Federal Reserve general counsel and a participant in the December 1988 session, "that you couldn't address these fundamental issues at the same time you were trying to get Congress to appropriate $50 billion for relief...

...But beginning in the early 1970s the world changed...

...Commercial banks now have $150 billion invested in leveraged buyouts and $600 billion in commercial real estate, a state of affairs reminiscent of the S&L meltdown...

...In banking, this option's been dubbed the "haircut," because each depositor would get a trim...

...Next: Whatever amounts are settled on should apply to an individual's total deposits held in federally insured banks—not on a bank-by-bank basis only, as is the case today...

...Though we've just forked up a cool $150 billion, our biggest banking crisis is still ahead of us...

...Consider all the dubious arguments and fancy euphemisms Leach can spin in a single sitting to avoid saying, "You just can't cut it once it's there": "It's not a political thing as much as a public kind of habit...

...The chairman of Washington Federal Savings, for example, wrote depositors in April that despite the legislation, "insolvent institutions...

...For better or worse," says Kenneth Guenther, executive vice president of the Independent Bankers Association of America (IBAA), the community bank trade group that is the chief advocate of the status quo, "we have a middle class entitlement here...

...It's not a concept that lends itself to a picture," laments Rep...

...Take Brooklyn Democrat Schumer, who sits on the House Banking Committee...

...Deposit insurance doesn't fit that...

...That's a fine thing to want, but not everything everybody wants can drive public policy...

...The impact on S&Ls—whose special charter was to funnel our savings into low-rate home mortgages— was even more dramatic, however...

...The timing couldn't be worse...

...This spring the big rating agencies even downgraded Citicorp's once-invulnerable credit rating...

...Did somebody say deja vu...

...Days before George Bush took office, Beryl Sprinkel, chairman of President Reagan's Council of Economic Advisors, ignited a brief firestorm when in his parting Economic Report of the President he dared to propose a reduction in the current $100,000 insurance level as part of a lasting S&L solution...

...There were no copies of the provisions available other than the one the House clerk was holding...

...The single essential thing that regulators must do is close down banks that are insolvent rather than let them try to gamble their way out of trouble...

...Charles Schumer, who sits on the House Banking Committee...

...Treasury Secretary Brady got so scared by the outcry over his early suggestion that depositors pay a tiny fee to help cover the S&L payoff that he's since become The Invisible Man...

...But with firefighters like these, we'd all better start organizing our own bucket brigade...

...Ponzi It was precisely at this point that deposit insurance became nefarious...

...But when "Brady's blunder" was called "politically naive" and "inept and offensive," the secretary turned yellow and ran...

...Hill staff members say our fearless leaders shed plenty of tears for thrift owners so low on capital they'd have trouble meeting even these shoddy standards, and thus grandfathered things accordingly...

...Yellow capitalism Such squirms are a delight to the IBAA's 6,000 small community banks, who feverishly defend the status quo as vital to their ability to compete with big banks in attracting deposits...

...It took minutes—there was no debate...

...An annual report on what's being done to fix banks floundering in the lower tranches should be required, to make the regulators accountable and to stop Congress from hiding from the facts...

...Congress and the states set geographic restrictions on bank expansion, including limits on branching and guild-like hurdles to obtaining new bank charters...

...All the heavyweights from the Federal Reserve and Treasury were there— except Nicholas Brady, who apparently had better things to do than shape the future of the financial system he oversees...

...The result...

...What's more, since the "limit" applied per depositor per institution, rich folks could spread their money among lots of banks and have all of it totally insured...

...The price of this blank check...

...Big businesses got smart and found they could raise funds more cheaply by issuing their commercial paper directly to the markets—they didn't need a middleman to assess how creditworthy they were...

...Despite the stakes, 'villainless themes like "the risks of deposit insurance in a modern banking system" won't inspire press coverage, either...

...their own pockets behind every $100 in loans they make...

...This means our tax dollars could be insuring everything from bum public offerings to burning buildings if the federal safety net isn't cut out from under these new "banking" businesses...

...continue to pay excessive rates for deposits .. . increasing our cost of funds...

...So even otherwise substantive politicians have developed handy non sequiturs to avoid being associated with any reduction of the $100,000 coverage...

...Since the Continental Illinois bailout in 1985—when all depositors above the $100,000 limit were paid off in full also—they argue that everyone (including the banks themselves) knows that these big banks are considered "too big to fail...

...The first would be to face deposit insurance head-on, limiting taxpayer exposure (and fat-cat benefits) by cutting back the amount of coverage...

...Debate or no, $100,000 coverage became a bank marketing manager's dream...

...And Seidman, whose personal credibility with Congress won his agency this new role, is already being ousted by President Bush for not being a "team player...

...Banks, boxed in by 50-year-old restrictions on their activities, may soon get the power to underwrite stocks and sell insurance...

...I suggested to Guenther that he could have been making the same passionate case for $40,000 and asked why, really, the IBAA thought the scope of taxpayer liability should be more than double its level in 1980, more than triple what it would be had the original 1935 coverage of $2500 been consistently adjusted for inflation, and up to 10 times the average bank account of an American...

...households today (let alone 10 years ago...

...But because of dramatic changes since the early 1970s, banking is more vulnerable today than at any time since the Depression...

...Still, Guenther predicts a "rebellion" should next year's Treasury study recommend cuts in existing levels...

...Even with recent increases in FDIC insurance premiums, one in five banks could go under and utterly deplete the FDIC backstop long before the last depositor is made whole...

...Why...

...Banks whose capital sank to certain marginal levels would be forced to suspend dividend payments and asset growth and to present a plan for recapitalization...

...On the coverage side, it's time to introduce a deductible into deposit insurance...

...It would be an enormous political battle...

...banking system may be vulnerable...

...Luckily the issue has been punted for so long that a ton of promising ideas are out there that can form the basis of a comprehensive overhaul...

...Meanwhile, as the Bush administration stumbles through yesterday's mess and prepares for the biggest real estate fire sale in human history, tomorrow's deposit insurance crisis simmers...

...Maybe not, says Guenther, but "We and our allies will hopefully create that `sensitivity' in the year ahead...

...Prompt Closure: The FDIC gets lots of new powers, but the fundamental discretion about when to take action remains...

...With newly enacted deposit insurance thrown in, each bank, whatever its size or pedigree, was as good as any other...

...In a federally insured bank, however, you simply raise interest rates a little bit higher than the bank next door...

...But it couldn't get the S&Ls out of their bind...

...Riskier activities, meanwhile, can be handled by separate bank entities that raise capital and take risks on the open market, not on Uncle Sam's credit card...

...If banks finally get the power to compete in other businesses like insurance and securities underwriting, firewalls should also be established to assure that the federal safety net won't extend there...

...How'd that happen...

...Like Frankenstein, however, the monster deposit insurance became was totally manmade...

...Yet it also transferred all credit risk in the banking system to the taxpayer, by assuring that the government stood ready to repay depositors whenever some daredevil or dimwit threw money away on nutty loans...

...When the old interest rate ceilings were finally phased out in 1980, that at least helped commercial banks compete without having to offer us toasters in lieu of higher interest...

...Well, bank ads, for one thing...

...And even normally gutsy free agents like FDIC chairman William Seidman, who told the National Press Club in 1988 that "a deposit insurance system out of control has the potential to `melt down' and damage the entire U.S...

...And this from one of the House's more substantive players...

...William Seidman's response to the fuss was more of an excuse than an explanation: "We had a fire to put out...

...What might that mean...

...are so busy worrying about the political damage coming from the S&L disaster that signs of a new crisis including commercial banks may not even be registering...

...Our Bank Investment Contract," boasted one bank in an ad featuring a photo of the Capitol, "Offers the Backing of a Higher Authority...

...Because our 13,000 commercial banks—sporting, at $3 trillion, three times the deposits of the S&Ls— could make today's crisis look pint-sized...

...Deposit insurance "hasn't gone to those it was intended to cover," says Henry Gonzalez...

...The stereotype [on banking] has been `deregulation, — he says...

...The deadly new provision was equally ignored on the Senate floor...

...Nicholas Brady denied that such heresies were even being discussed...

...And the rules are so loose that for five more years the same old accounting tricks will get cashshort operators halfway to that weak level...

...Now Treasury and the Congress are sitting on a deposit insurance powderkeg, and the silence is deafening...

...Shaky Thrifts: Even after the bail-out legislation's new rules, the chief causes of the S&L disaster—a toxic combination of institutional recklessness and depositor indifference and greed—are still in full flower...

...Another promising reform would be to privatize deposit insurance on the Lloyd's of London model...

...Greater measures should be taken to assure that insolvent banks get closed fast—since delay beyond insolvency is where the losses rack up...

...Over the past decade, banks jilted by their most credit-worthy borrowers and squeezed by new competitors— have been forced to take on riskier business to survive...

...Not exactly the S&L you knew and loved in "It's A Wonderful Life...

...If as a result, Consumer Reports starts rating banks for us, and the banks fight like hell to stay off the bad list, so much the better...

...What's worse, mismanaged S&Ls that haven't been shut down yet can still get waivers that allow using brokered funds anyway...

...have less than $10,000 in liquid assets...

...What could make it more obvious that we need to immediately restrict insurance to a depositor's total funds...

...The depositors don't care that you're insolvent because their money is government-guaranteed...

...It's been completely diverted from its intent...

...Once upon a time banking was a nice little racket...

...Uncle Sam and Mr...

...He asked for unanimous consent to amendments he'd arranged to have proposed in conference on the pending banking bill...

...I was not successful in getting one single member of either party to even consider proposing it," he told Institutional Investor last year...

...There's a `system-confidencequotient' in decision-making on deposit insurance that cannot be ignored...

...You'd think the potential for a commercial bank sequel to the S&L insurance meltdown would have our leaders sounding the alarm—but you won't find any profiles in courage when it might mean tampering with what is now perceived as virtually a consti-tutional right...

...banking system may be vulnerable...

...If anyone was looking for evidence that a political career in the age of entitlement is incompatible with a commitment to language as a vehicle for truth, voila...

...Germain, then the powerful Banking Committee chair and pawn of the S&L trade association, came in...

...If this sounds like a Ponzi scheme, it is...

...How do discredited S&L executives continue to bend Congress to their will hundreds of billions of dollars later...

...If those numbers seem big to you, keep counting...

...It should also ease the pressure on healthier banks, whose cost of funds rises when marginal banks jack up interest rates to attract these funds...

...When Henry Gonzalez dared to opine last fall that $100,000 coverage might not be a "divine right," The New York Times promptly responded that anything less would expose depositors to "horrific anxiety...

...We learned just how expensive that coverage was when failing S&Ls used deposits attracted by the enlarged federal guarantee to gamble on shopping malls, cattle farms, and junk bonds—and then stuck us with the bill...

...Bank failures seemed to be a relic of some bygone era...

...The Brady Plan on developing country debt vanished without a trace...

...Commercial banks got the exclusive right to offer checking accounts, which everyone needs...

...Getting inside this mentality is the prerequisite for understanding the political obstacles awaiting reform even if some of our leaders wake up...

...He and 10 other members were on the floor for other reasons in early 1980 when Rep...

...Bankers, like trapeze artists, try riskier stunts when they know there's a net beneath them...

...And with the Brady bunch diverting the best brains to damage control on the high-profile S&L front, there are more rookies minding the store on the bank side...

...We've spread ourselves about as far as we can...

...The 100 Grand Illusion The problem wi he banks and thrifts that they still haven't fixed by Matthew Miller They said they fixed it...

...Think of it this way: if someone tried to sell you an old $100,000 mortgage paying 6 percent and your alternative was to put your cash in a money market and earn 10 percent, you'd offer him less than $100,000 for the mortgage...

...Profiles in cowardice "Voiceover: Congressman Jack Doolittle—when he wasn't busy putting convicted killers back on the street, he slashed the insurance that protects your life's savings...

...And Treasury—where the leadership should come from—rests on laurels that would make even shiftless bureaucrats blush...

...The numbers can be tinkered with, but the idea is the same: to guarantee without question the savings of the less savvy among us, but to make the rest of us bear some risk so we'll have an incentive to look a little more closely at the institutions we're putting our money in...

...That's enough to make you really sweat about the banks...

...Riskless deposits combined with the S&L's risky investments are what triggered the current debacle in the first place...

...The other way would be to tighten regulation to reduce the odds that losses requiring insurance payoffs could occur in the first place...

...says the IBAA's Kenneth Guenther—but then small banks need some compensating tool to make them seem equally sound...

...economy," evasively says today, "I haven't got a preferred solution at the moment...

...This is what it is," he told me...

...And they're from your district...

...Professionally managed "brokered funds" were parceled out to insolvent thrifts nationwide in handy $100,000 chunks...

...Bush, Brady, and Co...

...But don't hold your breath...

...This would eliminate the ability of brokered money—a perfectly legitimate investment approach, it should be remembered—to extend the federal safety net to those it was not meant for...

...If our leaders actually show some leadership, these reforms could be packaged into a massive bundle of legislation that would prevent an S&L sequel and make our banks more competitive for 1992...

...Commercial banks now have $150 billion invested in leveraged buyouts and $600 billion in commercial real estate, a risky state of affairs Bryan calls "depressingly reminiscent" of the S&L meltdown...

...But fear isn't always a rational thing, as most congressional behavior in the face of a 98 percent reelection rate attests...

...Capital punishment This basic structure worked well for decades...

...What never grabs headlines, however, is how a single devious stroke added a whopping $50 billion to our bill when deposit insurance was raised from $40,000 to $100,000 in 1980...

...We could really use some politicians smart enough to see that although it's not the world, it's our standard of living, and brave enough to say that if it's not next Thursday, it's some time real soon...

...For assets that aren't publicly traded this will prove a bit thorny, but other proxies for current value can be roughed out...

...So the group punted by including a Treasury-led study of the deposit insurance issue in legislation, with recommendations due to Congress by February 1991...

...They didn't completely succeed," says Henry Gonzalez of the industry's attempt to water down standards, "but we lost some ground...

...Are legislators quaking already...

...Shortly after the FDIC's Seidman took the helm in 1985, he went to the Hill to discuss cutting back deposit insurance coverage...

...How did a certifiably good thing like deposit insurance become an agent of ruin...

...That's fine, If coverage hadn't been hiked in 1980 and perverted the intent of insured funds, says former FDIC Chairman William Isaac, "We would have saved $50 billion or more...

...With firemen like these .. . The perverse incentives and unintended beneficiaries of deposit insurance were hardly news to the Brady bunch that had to propose a way out of the S&L mess last year...

...Only later in a conversation does Schumer fess up about the $100,000 limit: "The political chips that would be expended to change it wouldn't bring a commensurate good...

...By the end of last year, in excess of $130 billion of this "hot money" was on deposit nationwide...

...Here's what happened...

...Banks are not like normal businesses when they reach the brink of insolvency...

...That's because accounting rules let you continue to carry that mortgage mentioned above at a stated value of $100,000, even though everyone knows it's worth less...

...Wall Street Journal editor Robert Bartley thinks the media blows it because the story doesn't fit the conventional wisdoms that untutored journalists rely on to peg complicated issues...

...You reach a point," he says, describing the congressional indifference after coverage was hiked to $100,000 in 1980, "where they make you feel like you're a guy wearing a sandwich board saying `the world's going to end next Thursday...

...Henry Gonzalez, the Texas Democrat who chairs the House Banking Committee, remembers the event well...

...Your nightmares may not take the form of thirtysecond attack ads...

...Even good guy Henry Gonzalez knows the odds aren't great...

...The result is they're being blamed for the rising cost of the S&L bailout when it should be Congress...

...The crowning blow, however, was the takeoff of inflation...

...The people who had the power to get it [lenient capital standards} in the first place," says banking expert Ed Kane of Ohio State University, "have the power to get it transitioned out slowly...

...A decade ago thrifts got precisely this chance to bankroll newfangled investments with Uncle Sam's credit card...

...The amendments contained the item raising the federal insurance guarantee by 150 percent...

...Assuming you wanted to solve things, there were basically two approaches you could take...

...In hearings this February and on the phone with me this past May, Schumer led with the argument that "just to move to slash deposit insurance from $100,000 to $50,000 or $40,000 isn't going to accomplish very much," because money brokers will just find a way to lump the funds together and extend their coverage as they do now...

...That's the way insurance companies in every other field—like health or auto—make sure we're not indifferent to the risks we're taking...

...In an ordinary business, if you don't have the cash to make the payroll or pay your suppliers, you close down...

...By 1980, when coverage per account was hiked from $40,000 to $100,000 in a legislative ploy that went virtually unnoticed, that net became more of a fundraising tool for marginal banks than a guardian of the little guy's savings...

...Jim Leach, the Iowa Republican who went so far as to vote against the S&L bill in part because it failed to take on deposit insurance, has his own brand of entitlement doubletalk...

...An increasingly strict series of market-value capital "tranches" (as a Brookings Institution Task Force called them) should be established at the same time, with published, nondiscretionary regulatory consequences flowing from each...

...Accounts might be covered at 100 percent for the first $30,000, to keep faith with the inflation-adjusted guarantee originally legislated in the New Deal...

...For those of us not subject to this kind of sensitivity training, some prompt reforms make sense...

...It's a straw man technique and Schumer knows it, but it's useful rhetorically to get past any reporter's first question and to go on the record as pro-$100,000...

...He's counting on the credit unions, the small business trade groups, the elderly, and (that's right) the S&Ls to join the IBAA in leading the charge for inertia...

...Legislators should also be required to log—publicly—with both the ethics and banking committees any discussions they have with regulators on behalf of their hometown favorites, just to keep tomorrow's Keating Fives honest...

...This brought higher interest rates as lenders demanded compensation for the value their money lost before repayment...

...In December 1988, shortly after Bush's election (after a campaign, recall, in which both parties, dripping with blame, agreed not to raise a peep about the issue), a meeting to discuss S&L solutions was convened in Alan Greenspan's library at the Fed...

...What's worse, the thrifts had to offer higher rates to attract new deposits than they were getting in cash from these old home loans...

...And don't mess with it...

...Meanwhile, Congress wages more important battles against flag burning and homoerotic art...

...Forget the fact that more than 75 percent of U.S...

...That's a little like cutting off a junkie after he's gone through all the drugs...

...Politicians who understand the stakes would sooner sacrifice their first-born than talk about reducing the $100,000 coverage...

...This dodge will become a matter of hot debate as the bailout continues to be botched and the political finger-pointing mounts...

...The system relied on its stranglehold on individual depositors (and mortgage-seekers) like you and me and business and mortgage borrowers...

...That's because the collapse of the banking system in the Great Depression prompted government at all levels to legislate banking competition out of existence...

...Banking expert Lowell Bryan of McKinsey and Company told the Senate Banking Committee last month that up to one-quarter of the $3 trillion in the U.S...

...Some highlights from the final S&L bill show why: Capital: The new thrift standards come advertised as "banklike...

...This is how $100,000 coverage in a program originally intended to protect the proverbial widows and orphans against bank failure was pushed through...

...This missed opportunity to educate the public on the deposit insurance issue (and on the Democrats' responsibility for raising the coverage) is "the Bush administration's biggest mistake thus far," according to The Wall Street Journal's Bartley...

...It's a little bit like tax policy—high rates for higher income groups sometimes don't appeal to people in middle income brackets because they hope to become people in higher income brackets themselves...

...Regulators in a crisis may inevitably perceive that allowing uninsured deposits to be lost in a major bank failure would shake confidence in the system and cause macroeconomic disruptions...

...But anyone with a brain knows that limiting coverage to a total amount still defeats the brokers...

...Research assistance by George C. Taylor...

...There's no doubt," says John Bovenzi, William Seidman's deputy at the FDIC...

...His instincts about what would fly politically were correct: Days later, he took a media drubbing for publicly entertaining a miniscule 25 cent per $100 fee on depositors' accounts to help pay off savers at failed thrifts...

...sured funds, says former FDIC Chairman William Isaac, "We would have saved $50 billion or more...

...Even with a year-long debate, massive legislation, and "never again" assurances from every corner, the S&L bailout failed to address the fundamental threat to our banking system...

...It began in the 1930s as a sensible way of restoring confidence and preventing bank runs...

...But as long as bureaucrats are human, they'll have an incentive to sweep trouble under the rug...

...Understanding the transformation requires a brief trot through banking history...

...Since nobody had alternatives, being a successful banker didn't exactly take genius—you took in money below the mandated interest ceilings and lent it out at a few points more...

...By the late 1970s, much of the thrift industry was insolvent, though its books didn't show it...

...Consider: more commercial banks failed (that's right, not S&Ls) in the past two years than ever before...

...Greenspan floated the idea of a deposit insurance overhaul and talked about abolishing the separate thrift industry...

...These financial statements should be prepared in annual audits performed jointly by two certified public accountants— one hired by the bank, and one by the regulators— to guard against the see-no-evil tendency CPAs too often exhibit when big bank clients hit the skids...

...And finally: "Well, the $100,000 is going down 4 percent a year—by inflation— so if there's a case for gradualism, it's occurring...

...The Brady Commission's post-crash report on stock market reform went nowhere...

...That way you attract the cash deposits to meet your expenses and invest what's left over in whatever you think will return enough to get you out of the hole...

...If coverage hadn't been hiked in 1980 and perverted the intent of inMatthew Miller is a management consultant in New York City...

...The best capitalized banks would be subject to virtually no supervision...

...We may not have the luxury of waiting...

...Of course, that's an argument for insurance in general, not an argument for $100,000...

...Any proposal to change deposit insurance coverage is "like saying you're going to take away social security benefits," says ex-FDIC chief Isaac...

...The problem is federal deposit insurance...

...Brady's touted program to get corporate America focused on the long-term was never proposed...