Merging the BIF and the SAIF: Would a Merger Improve the Funds' Viability

摘要

As part of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), the Savings Association Insurance Fund (SAIF) was created. Ever since its creation, however, it has been considered vulnerable, partly because of its small size and partly because of its geographic concentration. SAIF-member institutions constitute a much smaller portion of U.S. banking organizations than Bank Insurance Fund (BIF) member institutions do. As of year-end 1998, the SAIF had 1,430 members, roughly 16 percent the number of BIF members, and the SAIF insured an estimated ;709 billion in deposits, roughly 33 percent of the estimated deposits insured by the BIF. In addition, SAIF-member institutions are geographically concentrated, unlike BIF-member institutions.