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1992 Bank Resolutions: FDIC Chose Methods Determined Least Costly, but Needs to Improve Process

GGD-94-107 Published: May 10, 1994. Publicly Released: May 10, 1994.
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Highlights

Pursuant to a legislative requirement, GAO reviewed the Federal Deposit Insurance Corporation's (FDIC): (1) compliance with the least-cost provisions of the Federal Deposit Insurance Act; and (2) resolution process.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Acting Chairman, FDIC, should require the Division of Resolutions (DOR) to document the rationale for its marketing strategies for resolving all failing or failed banks.
Closed – Implemented
DOR completed the updating of its internal operating procedures to require compliance with this recommendation, and GAO's review of 1993 resolutions found that DOR documented the rationale for its marketing decisions.
Federal Deposit Insurance Corporation The Acting Chairman, FDIC, should require DOR to submit the documented record of the marketing strategies to the FDIC Board for its consideration in making the least-cost resolution decisions.
Closed – Implemented
DOR completed the updating of its internal operating procedures to require compliance with this recommendation.

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Topics

Financial Markets and Institutions
Bank failuresBank managementBanking lawCost effectiveness analysisFinancial institutionsFinancial managementFinancial statement auditsInsured commercial banksRecordsDeposit insurance