Jump to Content Jump to Main Navigation

10 The US Paradigm: Deposit Insurer as Resolution Authority

From: Deposit Protection and Bank Resolution

Nikoletta Kleftouri

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 20 September 2021

Subject(s):
Deposit insurance schemes — Deposit protection schemes — Federal Deposit Insurance Corporation (FDIC) — United States Treasury

Banking crises prompted the United States to make lending of last resort, deposit insurance, and bank resolution federal responsibilities long before banks crossed state lines in large numbers. The US system offers an existing and successful model, whereby the deposit insurance and resolution functions are combined under a single institution, the Federal Deposit Insurance Corporation. The key objective underpinning the FDIC’s choice among different resolution options is that the chosen resolution is that which would result in the least cost to the deposit insurance fund. This chapter sets out the role of the FDIC as the deposit insurer, supervisor, and resolution authority, while also examining some key principles of the US approach to dealing with failing banks.

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.