**GAO-10-100**                      Published: Apr 15, 2010. Publicly Released: Apr 15, 2010.                  

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## Highlights

In 2008 and 2009, the Federal Deposit Insurance Corporation (FDIC) provided emergency assistance that required the Secretary of the Department of the Treasury (Treasury) to make a determination of systemic risk under the systemic risk exception of the Federal Deposit Insurance Act (FDI Act). The FDI Act requires GAO to review each determination made. For the three determinations made to date, this report examines (1) steps taken by FDIC, the Board of Governors of the Federal Reserve System (Federal Reserve), and Treasury to invoke the exception; (2) the basis of the determination and the purpose of resulting actions; and (3) the likely effects of the determination on the incentives and conduct of insured depository institutions and uninsured depositors. To do this work, GAO reviewed agency documentation, relevant laws, and academic studies; and interviewed regulators and market participants.

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## Matter for Congressional Consideration

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## Topics

Financial Markets and Institutions

AccountabilityBank depositsBank failuresBank managementBanking lawBanking regulationDebtDecision makingEligibility determinationsFederal regulationsFederal reserve banksFinancial analysisFinancial institutionsFinancial managementFinancial markets regulationFinancial regulationInsuranceInsurance lossesInsured commercial banksLending institutionsMonitoringNational banksRisk assessmentRisk factorsTransparency