On Tuesday, the Federal Deposit Insurance Corp. proposed cutting bank premiums 83% to an average of 4.5 cents for every $100 of domestic deposits. The Bank Insurance Fund will shortly reach its recapitalization level of $1.25 in reserves for every $100 of insured deposits.

The agency also recommended leaving thrift rates at the current level of 23 cents to 31 cents because the Savings Association Insurance Fund is not expected to hit the 1.25% target until 2002. Below are excerpts from the FDIC's proposal to retain current thrift rates, which addresses the effect that higher rates may have on the thrift industry.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.