Skip to main content

Reserve Ratio

AIMD-95-154R Published: May 31, 1995. Publicly Released: May 31, 1995.
Jump To:
Skip to Highlights

Highlights

Pursuant to a congressional request, GAO provided information on the designated reserve ratio established for the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). GAO noted that: (1) there is a minimum ratio of reserves to insured deposits of 1.25 percent or higher for BIF and SAIF; (2) the Federal Deposit Insurance Corporation may increase the designated ratio for any year to protect against future losses to either BIF or SAIF; (3) it did not analyze the adequacy of the designated reserve ratio, since there was no scientific method of determining the appropriate level of budgetary reserves; and (4) regulatory reforms should minimize the risk that losses will deplete the insurance funds' reserves if such reserves are maintained at the designated reserve ratio.

Full Report

Office of Public Affairs

Topics

Bank depositsBank failuresBudgetary reservesFederal corporationsFinancial managementFunds managementInsurance premiumsInsured commercial banksRisk managementSavings and loan associations