Statement of John F. Bovenzi, Deputy to the Chairman and Chief Operating Officer, Federal Deposit Insurance Corporation on Promoting Bank Liquidity and Lending Through Deposit Insurance, Hope for Homeowners, and Other Enhancements before the Committee on Financial Services; U.S. House of Representatives, February 3, 2009.
“As part of our contingency planning, the FDIC would recommend that Congress provide additional support for our deposit insurance guarantee by increasing our existing $30 billion line of credit to $100 billion. Assets in the banking industry have tripled since 1991 — the last time the line of credit was adjusted in the FDIC Improvement Act (from $5 billion to $30 billion). The FDIC believes it would be appropriate to adjust the statutory line of credit proportionately to ensure that the public has no confusion or doubt about the government’s commitment to insured depositors. Because of the FDIC’s ability to adjust premiums, the FDIC has never needed to draw on the line of credit to cover losses.”
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