Earlier this year, the FDIC launched a full-scale review of the nation's deposit insurance system. I can scarcely imagine a more opportune time for such a review to occur. BIF and SAIF are both at levels in excess of their statutorily determined reserve ratios. Assets and deposits continue to grow, if more slowly than in recent years. Capital is at historical highs.
Bank failures are a rarity.
It's also clear, however, that the economy and the banking system are entering a period of uncertainty. Rising interest rates and a slowdown in economic growth have already had an impact on bank financial statements. Securities losses have increased and noninterest income growth has slowed. So it's particularly important that we act now to take a fresh look at our deposit insurance system while there's still time to do it methodically, inclusively, and comprehensively. These areas are badly in need of reform.