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Deposit insurance, DIF ratio and resolution tools debated as regulators seek more flexibility
Summary
Members questioned FDIC and other regulators about the deposit insurance fund (statutory 1.35% minimum), the fund's reserve ratio, and whether Congress should grant temporary systemwide guarantees or modify least‑cost resolution rules to allow quicker responses during runs.
Lawmakers pressed the FDIC on the Deposit Insurance Fund (DIF) reserve ratio and the agency’s resolution toolbox following the failures of several banks in 2023.
Acting FDIC Chair Travis Hill explained the statutory minimum reserve ratio of 1.35% and described staff projections indicating the reserve ratio could ‘‘grow more slowly’’ under certain deposit‑insurance expansion scenarios. He cautioned…
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