WASHINGTON--A deposit insurance premium averaging 27 cents per $100 of deposits is too high for sound banks and too low for troubled ones, members of the Shadow Financial Regulatory Committee said Monday. The FDIC board is slated to vote today to raise the premium from 23 cents.
The shadow committee, an unofficial but influential group of economist-critics of bank regulation, said the new rate was expected to range from 24 cents for the healthiest banks to 33 cents for the riskiest, instead of 25 cents to 31 cents as previously proposed.
Increase Termed Timid
The average fee would be 27 cents per $100 of domestic deposits, lower than the 28-cent figure previously bandied about.
"They are very timid changes," said Edward J. Kane, a professor of Boston College. He said the lower premium for healthy banks was in the right direction, but still not low enough.
Committee members said the steady rise in premiums was forcing banks to collateralize some of their best assets.
Further premium increases "would create new incentives to avoid the payment of an unavoidable tax," said Richard C. Aspinwall, chief economist of Chase Manhattan Bank.
Mr. Kane said the base premium rate should be perhaps as low as 8 to 10 cents, though this idea has not been endorsed by the committee. He said there should be no limit for the riskiest banks.
George G. Kaufman, a professor at Loyola University in Chicago, said he expects premiums to be reduced "sharply" in the future as more problem banks are weeded out of the system and regulators used new powers to take quick action.
Other Rules Criticized
The committee also expressed concerns about several other regulatory proposals, saying:
* A rule that would control interest rate risk needs to be reworked completely before it can effectively limit the risk exposure of the Bank Insurance Fund.
* Standards for safety and soundness in the 1991 banking law could become "unduly costly" for the industry.
* The proposed rule limiting interbank credit exposures gives regulators too much discretion to declare a bank a source of systemic risk. The committee said banks with funds at risk are well suited to monitor other banks.