Bank customers would not object to a scaling back of deposit insurance, claimed Ernest Ginsberg, vice chairman of Republic National Bank in New York.

"I don't believe the public would be upset," Mr. Ginsberg said Friday of last week's Bankers Roundtable proposal to end the government's backing of the Federal Deposit Insurance Corp.

"Our proposals don't include eliminating the FDIC" and would make creditors bear more of the cost of failures, he said at a seminar on deposit insurance sponsored by the American Enterprise Institute.

The Roundtable, which represents the 125 largest banks, also last Tuesday recommended canceling the government's so-called "too big to fail" policy for big banks and limiting deposit coverage to $100,000 per person per institution.

These changes would relieve taxpayer liability for bailouts and justify lighter regulation and expanded banking powers, the Roundtable said.

But FDIC Chairman Ricki Helfer and advocates for small banks criticized the proposal as "anti-consumer" and a threat to public confidence in the financial system.

Academics on the institute panel were far more positive.

"There's a lot to like" in the plan, including proposals for more market discipline of financial institutions, said Charles W. Calomiris, a Columbia University finance professor.

Mr. Calomiris said small-bank objections spring from fears that large banks would win expanded powers in return for reduced deposit insurance, and thereby gain a competitive edge.

Edward J. Kane, a deposit insurance expert at Boston College, said private-sector oversight cannot replace regulation until institutions are required to disclose more financial information to the public and regulators are forced to reveal problem institutions to the public sooner.

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