Number: RS21987
Title: When Financial Businesses Fail: Protection for Account Holders
Authors: Walter W. Eubanks, Government and Finance Division 
Abstract: Lawmakers have long recognized the importance of protecting some forms of financial savings from risk. Such vehicles clearly include deposits in banks and thrift institutions and credit union "shares." Remedial and other safety net features also cover insurance contracts, certain securities accounts, and even defined-benefit pensions. Questions over how to fund and guarantee Social Security, along with the troubles of the Pension Benefit Guaranty Corporation, have renewed interest in these arrangements. This report portrays the salient features and legislation of account protection provided by the Federal Deposit Insurance Corporation, the National Credit Union Share Insurance Fund, state insurance guaranty funds, the Securities Investor Protection Corporation, the Pension Benefit Guaranty Corporation, and a discussion of the FDIC's Temporary Liquidity Guarantee Program that extends unlimited temporary deposit guarantees to certain depositors and debt held in insured depository institutions. It ends with a discussion of monoline insurance companies. Overall, it provides resources for further analysis of each protective arrangement.
Pages: 6
Date: November 20, 2008