Statement of Rep. Carolyn B. Maloney Financial Institutions Subcommittee
I thank Chairman Bachus for holding this hearing on modernizing the deposit insurance system. For over 65 years our deposit insurance system has effectively maintained public confidence in the banking system during periods when financial institutions have been profitable and when they have suffered failures.
As we consider modernizing this system, maintaining public confidence in our financial institutions and guarding their safety and soundness must be our driving focus.
We are fortunate to be considering this topic at a time when banks are highly profitable and well capitalized. At the same time, uncertainty about the future of the economy is a warning that the good times will not last forever.
While the insurance funds are still comfortably above their mandated reserve ratios, the uncertainty about equity markets has driven a substantial amount of funds into the banking system, increasing the deposit base. The possibility that this trend continues makes the need to merge the insurance funds even more timely.
Finally, I want to complement the work of the FDIC in presenting this Committee with a thoughtful proposal for the future of insurance system. I agree with the FDIC's position that a modern insurance system should include the general principle of risk-based pricing. Finally, let me thank Ms. Donna Tanoue for her service and leadership at the FDIC. I wish you the best in all your future endeavors.