[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-321609-105":3,"detail-sidebar-cat-0-en-105":81,"doc-detail-321609-en":130},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","saif-policy-options-what-about-thrifts","SAIF Policy Options - What about Thrifts?","","The document analyzes policy options for capitalizing the Savings Association Insurance Fund (SAIF) under the FIRREA-mandated coverage ratio. It explains how SAIF deposit insurance premiums may rise dramatically relative to the Bank Insurance Fund (BIF), creating competitive disadvantages for thrift institutions. It also discusses how FICO bond obligations, market integration, and the diminishing thrift role in mortgage specialization complicate policy choices, including no action, taxpayer-funded capitalization, and possible mergers of insurance funds.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/saif-policy-options-what-about-thrifts/321609/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/saif-policy-options-what-about-thrifts/321609.png","ImageObject",300,407,{"name":42,"@type":43},"Patrick","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-22","2026-09-21",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",7,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"What coverage requirement does FIRREA impose on SAIF and BIF?","Question",{"text":63,"@type":64},"FIRREA mandates a minimum coverage ratio of $1.25 of insurance reserves per $100 of insured deposits for BIF and SAIF. The FDIC expects BIF to reach the mandated 125-basis-point ratio by midyear.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"Why is SAIF capitalization becoming more uncertain?",{"text":68,"@type":64},"SAIF may face deposit insurance premiums far higher than those assessed on BIF-insured institutions, which pressures thrift competitiveness and deposit quantities needed to capitalize SAIF. In addition, FICO bond obligations tied to the prior FSLIC fund restrict thrift ability to capitalize SAIF.",{"name":70,"@type":61,"acceptedAnswer":71},"What policy options does Congress consider for dealing with SAIF?",{"text":72,"@type":64},"Congress faces multiple choices, including taking no action, having taxpayers fund SAIF capitalization, merging the two FDIC insurance funds, and employing various intermediate strategies.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},321609,1790340310,{"code":4,"msg":82,"data":83},"success",[84,88,92,96,101,106,110,114,119,122,126],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":85,"show_sort_weight":86,"slug":87},"Story & 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Financial InstitutionsReform,Recovery,and Enforcement Act(FIRREA)of 1989,Congress mandateda minimum coverage ratio of $1.25 ofinsurance reserves per $100 of insureddeposits for the Bank Insurance Fund(BIF)and Savings Association Insur-ance Fund(SAIF).The Federal DepositInsurance Corporation(FDIC),whichadministers both funds,estimates thatthe BIF's ratio will reach the mandated125-basis-point coverage ratio bymidyear and that as a result,banks andother BIF-insured depositories are likelyto see their average deposit insuranceassessment fall from 24 cents per $100of domestic deposits to 4 cents by theclose of 1995.2  \nintermediate strategies.³While much ofthe policy debate on the impending BIF/SAIF premium differential has focusedon important issues such as fairness,thecompetitive impact on thrifts,and theconsequent ramifications for the SAIF,alarger issue looms:What is the publicpolicy objective served by savings asso-ciations?⁴Only after policymakersanswer this question can they weigh theoptions for dealing with the SAIF.  \nThe ability of the thrift industry tocapitalize the Savings Association In-surance Fund(SAIF)is becoming in-creasingly uncertain.By the end of theyear,SAIF-insured thrifts may facedeposit insurance premiums six timesgreater than those assessed on banksinsured by the Bank Insurance Fund(BIF).In fashioning a solution for theSAIF problem,fundamental questionsabout the policy objectives for savingsassociations should be at the forefrontof policymakers'discussions.  \nAn additional concern surrounds theFinancing Corporation(FICO)bondsauthorized by the Competitive EqualityBanking Act of 1987 to partially recapi-talize the now-defunct Federal Savingsand Loan Insurance Corporation Fund,which the SAIF was set up to replace.This FICO obligation has impaired theability of thrifts to capitalize the SAIF.Inaddition,the increasing probability thatthe SAIF may soon be unable to meet itsobligation to make FICO interest pay-ments could result in a SAIF fundingsolution that is expedient,but inconsis-tent with public policy objectives.  \ndiscuss how policy choices for dealingwith the FICO problem should be drivenby the same principles applied to theSAIF problem.  \nOn the other hand,the SAIFended 1994far short of the estimated $8.6 bllion itwould need to meet the minimum cover-age ratio mandated in FIRREA.Thismeans that SAIF-insured thrifts will con-tinue to be assessed premiums averaging  \n## ■ What about Thrifts?\n\nAs we argued in a previous EconomicCommentary,with the increased inte-gration of financial markets and the con-sequent competition across industrylines,there appears to be little justifica-tion for maintaining separate regulatorystructures and deposit insurance fundsfor banks and thrifts.⁵Despite beingrestricted by the qualified thrift lendertest (65 percent of assets must be held inmortgages or mortgage bank securities)savings institutions are no longer thepredominant holder of home mortgages(classified as one-to four-family mort-gages in table 1).Moreover,the mort-gage holdings of thrifts as a share oftotal mortgage debt has been decliningfor more than a decade(see figure 1).  \n24.5 cents per dollar of domestic deposits—six times that of BIF-insured institu-tions.This premium differenial placesSAIF-insured thrifts at a competitive dis-advantage to BIF-insured banks andthrifts in deposit markets.It may alsohave a negative impact on the quanity ofdeposits held by SAIF-insured deposito-ries,thereby compromising the ability ofthe thrift industry to capitalize the SAIF.  \nWe contend that the option for dealingwith the SAIF problem should be chosenbased on policy objectives for savingsassociations.To pursue a legislativesolution for the SAIF without appraisingthe role of thrifts is putting the cartbefore the horse.Some alternatives,suchas no legislative action,are likely to fos-ter a decline in the savings and loanindustry.Others,such as a","cbCainxek6giFSNJ","https://ap.wps.com/l/cbCainxek6giFSNJ","pdf",1393591,"English","# SAIF Policy Options\n## What about Thrifts?","[{\"question\":\"What coverage requirement does FIRREA impose on SAIF and BIF?\",\"answer\":\"FIRREA mandates a minimum coverage ratio of $1.25 of insurance reserves per $100 of insured deposits for BIF and SAIF. The FDIC expects BIF to reach the mandated 125-basis-point ratio by midyear.\"},{\"question\":\"Why is SAIF capitalization becoming more uncertain?\",\"answer\":\"SAIF may face deposit insurance premiums far higher than those assessed on BIF-insured institutions, which pressures thrift competitiveness and deposit quantities needed to capitalize SAIF. In addition, FICO bond obligations tied to the prior FSLIC fund restrict thrift ability to capitalize SAIF.\"},{\"question\":\"What policy options does Congress consider for dealing with SAIF?\",\"answer\":\"Congress faces multiple choices, including taking no action, having taxpayers fund SAIF capitalization, merging the two FDIC insurance funds, and employing various intermediate strategies.\"}]","SAIF Policy Options - What about Thrifts? | PDF",1789959788,13]