WASHINGTON - To win an increase in deposit insurance coverage, bankers must leap bigger obstacles than Sen. Phil Gramm or Alan Greenspan - they must slay the specter of the 1980s savings and loan crisis.

The Senate Banking Committee chairman and Federal Reserve Board chairman have opposed doubling coverage to $200,000 per account, in part because the last hike, in 1980, was a major cause of the thrift industry's collapse. That increase, they contend, helped reckless thrifts attract depositors who did not have to worry where they put their federally guaranteed money.

Industry officials are calling this take on the history of the 1980s inaccurate or, at best, incomplete, and some leading voices are in their corner.

"I don't think the raising of coverage had anything to do with the savings and loan crisis," said L. William Seidman, chairman of the Federal Deposit Insurance Corp. from 1985 to 1991 and author of a book on the crisis. "It may have made some of the losses bigger, but the crisis was caused by inadequate supervision and regulation."

Another former FDIC chairman calls the last coverage hike a serious mistake.

"I don't believe the coverage hike was the sole cause of the crisis," said William Isaac, the agency's head from 1981 to 1985. "But when Congress raised the limit, it was like throwing gasoline onto a fire. The FDIC pleaded with Congress not to do it."

Proponents of higher coverage respond that the role of the last hike was minor. "Raising it to $100,000 may have made that easier, but they would have just as easily done that" with the previous limit of $40,000, said James Chessen, chief economist at the American Bankers Association.

The FDIC's recently issued, 84-page "options paper" of reform suggestions says there is "a potential for higher coverage limits to facilitate deposit-gathering by institutions that engage in high-risk activities." Yet the agency argues that other proposed reforms could counter this risk and prevent another crisis.

One option the paper presents is a new way to price institutions' risk. More than 92% of banks currently fall into the same low-risk category, paying nothing for deposit insurance.

Under an alternative proposed by the agency, banks would pay a premium based on the size of their insured deposits, probability of failure, and severity of the potential loss to the funds. Arthur Murton, director of the FDIC's insurance division, said this system would make riskier banks pay more in premiums.

Analysts said another advantage of this alternative would be that institutions would pay more if their deposits grew. Karen Shaw Petrou, president of ISD/Shaw, said, "If risky institutions paid more, it would limit their capacity to attract unlimited amounts of new deposits."

Industry officials also argue that the status quo poses a worse danger than raising the limit because banks will take excessive risks to find new sources of funds to replace dwindling deposits.

Mr. Seidman said a coverage hike "would reduce risk" in some ways. "It makes these community banks stronger. Right now they aren't taking deposits in that are adequate to meet loan demand, so they are looking at higher-cost funding, which weakens their financial position."

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