WASHINGTON -- Rep. Thomas E. Petri, R-Wis., introduced legislation last week that supporters say would bring market discipline to the deposit insurance system.

The "cross-guarantee" concept would require banks and thrifts to seek guarantees from syndicates of banks, thrifts, and private-sector institutions on all deposits and most other liabilities. Since those institutions are themselves guaranteed by syndicates 6f financial institutions, the insurance amounts to a cross-guarantee.

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