The authors examine FDIC-insured institutions that became critically undercapitalized from 1994 through 2000 to develop improvements to prompt corrective action (PCA) or the supervisory process. Institutions are grouped by outcome, differences between groups are analyzed, and the results and implications for supervisory policies are discussed.
The health of the economy clearly affects the health of the banking industry. But could the FDIC use current economic data to forecast the future performance of banks? This article attempts to address this question and finds that while state-level economic data is an important explanation of the past, it has limited usefulness for forecasting the future.
This regular feature of the FDIC Banking Review contains information on regulatory agency actions, state legislation and regulation, and articles and studies pertinent to banking and deposit insurance issues.
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Chairman Donald E. Powell
Director, Division of Insurance and Research Arthur J. Murton