Deposit Insurance Reforms Urged: The chairman of...

Deposit Insurance Reforms Urged: The chairman of the House Banking Committee called for a broad range of steps to bolster the nation’s deposit insurance system, with closer regulation and the creation of a new agency. The proposals by Democrat Henry B. Gonzalez of Texas--the first comprehensive proposals to overhaul deposit insurance --would boost the costs for depositors at banks, thrifts and credit unions as well as the institutions themselves. Gonzalez essentially called for limitations on insurance coverage to amounts authorized by law, arguing that nearly all deposits today are effectively insured--notwithstanding the limit of $100,000. The plan would require regulators to take quick action when an institution loses capital, and make holding companies responsible for losses suffered by affiliates.