Public Comment Failure to Timely Pay Assessments Kenneth Thomas

STATEMENT OFKENNETH H. THOMAS, Ph.D.LECTURER ON FINANCETHE WHARTON SCHOOLUNIVERSITY OF PENNSYLVANIAPHILADELPHIA, PA.(KHThomas@wharton.upenn.edu)before theFDIC ROUNDTABLEonDEPOSIT INSURANCE REFORMApril 25, 2000Washington, D.C.EXECUTIVE SUMMARY OF RECOMMENDATIONSThe following are my deposit insurance reform recommendations for the three broadareas identified in the FDIC Roundtable agenda:I. PRICING1. Revision of the current risk–based assessment structure to better differentiateamong risk profiles, with a provision for “special risk” assessments for de novoinstitutions, very rapidly growing ones, and other that pose special risks to thedeposit insurance funds.2. Explicit recognition of the “Too Big To Fail” (TBTF) policy in the form of a specialassessment for TBTF banks.3. Significantly expanded market discipline, beginning with the public disclosure ofsome essential safety and soundness information on banks and thrifts such asCAMELS ratings and a portion of the safety and soundness exam.4. Significantly improved bank regulatory and supervisory discipline so there arebetter risk management procedures, earlier identification of problem banks, and areduction in the cost of failed ones.5. Merging of the OTS into the OCC as the first step towards a more effective andefficient federal financial institution regulatory structure.II. MAINTAINING THE FUNDS 1. Merging of the BIF and SAIF insurance funds ASAP.2. Increasing the 1.25% statutory ...