Head of Fdic’s Insurance Division to Discuss Deposit Insurance Reforms Dec. 5 at Colorado State

The director of the Federal Deposit Insurance Corporation’s division of insurance will visit Colorado State University Dec. 5 to outline his agency’s proposed changes to deposit insurance regulations.

Arthur J. Murton will address students, entrepreneurs and the banking community from 3-4:30 p.m. in Room 100 Eddy Building. The presentation, titled "Deposit Insurance Reform: A View from the FDIC," is free and open to the public.

The talk is sponsored by the department of economics, College of Business and the department of finance and real estate.

Murton, a long-time employee at the FDIC, was selected in 1995 to head the agency’s newly-created Division of Insurance. The division analyzes regional and national economic trends with the goal of avoiding the costly bailout of bank and savings thrift failures that took place in the early 1990s.

Murton and his agency are directly involved in proposals to reform the federal deposit insurance program to better reflect the current organization of banks and thrifts nationwide. Created in 1933 to stem instability in banking and to protect deposits made by account holders, proposals for reform could include developing a way to expand the matrix the FDIC uses to set rates for bank and savings thrifts deposit insurance premiums.

According to an article in American Banker magazine, although the deposit insurance premium rates are supposed to be based on how much risk a bank or thrift poses, more than 95 percent of all banks and 90 percent of all savings thrifts qualify for the lowest rate, which is zero.

Ronnie Phillips, economics professor at Colorado State and the presentation’s organizer, said Murton’s talk will offer participants a glimpse into the FDIC’s proposals for deposit insurance reform that the agency will unveil in January.

"Reforms to the FDIC’s federal deposit insurance regulations are the dominant topic in the banking industry," Phillips said. "This presentation will shed some light on what the FDIC wants to do to keep a banking crisis from happening in the United States again."

For information about the presentation or proposed changes to deposit insurance regulations, call Phillips at (970) 491-6079 or Rick Johnson, professor of finance and real estate, at (970) 491-5564.