I intend for the people of the FDIC to be among them. I do not have to tell you how many times I have warned that the undercapitalization of the SAIF is not just a thrift problem, it is a problem for the entire financial system. The safety net for our financial system rests ultimately on confidence. Confidence in government's backing for the safety net was a major reason that the financial troubles of the 1980s and early 1990s did not lead to widespread panic and economic disarray. That confidence could be damaged if government is perceived as no longer willing to support one or more components of the safety net.
Deposit insurance is essential to the fabric of that safety net.
Legislation that would capitalize SAIF may at this moment be under consideration in Congress. Therefore, there is no better time to remind ourselves that the failure of the SAIF would undermine the confidence Americans have in the FDIC as a source of stability for the financial system and would call into question the government safety net for financial institutions. The time has come to put the past behind us. I favor this approach because it would assure the immediate soundness of the SAIF, the confidence of the public in the safety net, and the stability of the financial system. The sooner this solution is in place, the better for all of us.