Bank Insurance Fund


Also found in: Acronyms.

Bank Insurance Fund (BIF)

Bank Insurance Fund

Also called the BIF. A pool of money created in 1989 by the FDIC to insure deposits made by banks that are members of the Federal Reserve System. The BIF was created to separate bank insurance money from thrift insurance money (which came from the Savings Association Insurance Fund). While this was likely beneficial for a time because of the savings and loan crisis, it created a perverse incentive for banks and thrifts to reclassify themselves as the other (i.e. a bank to a thrift or a thrift to a bank), depending on which fund had lower fees at a given time. This led to the passage of the Federal Deposit Insurance Act of 2005, which abolished the Savings Association Insurance Fund and the BIF and created a single Deposit Insurance Fund.

Bank Insurance Fund

The federal fund administered by the Federal Deposit Insurance Corporation, which insures the deposits of individuals who invest at banks that are members of the Federal Reserve System. This includes all national banks and state banks that choose to join the Fed. The fund was created in 1989 in order to separate the insurance funds for commercial banks from those that insure thrift institutions.

Bank Insurance Fund

The new name of the former fund of the Federal Deposit Insurance Corporation (FDIC).The FDIC is still alive and kicking,only the fund has changed names.

References in periodicals archive ?
A consequence of the recovery was the rapid growth in the Bank Insurance Fund.
The level of deposit insurance premiums paid by banks (BIFPREM) into the Bank Insurance Fund (BIF) does not enter the deposit supply equation, but since it should affect banks' demand for deposit funds, it is one of the instruments that we employ to identify the residual supply equation.
The Bank Insurance Fund (BIF) insures bank deposits and is fully capitalized so banks pay a flat annual fee of only $2,000 for insurance on their deposits while thrifts must pay the undercapitalized Saving Association Insurance Fund about $.
Length of time to failure = f(bank assets, city population, cost to bank insurance fund of bank failure, change in bank assets, Senator from bank's home state on the Senate banking committee, number of representatives from bank's home state on the House banking committee, regulator identity, and region of the country).
Many adequately capitalized thrifts exited the Savings Association Insurance Fund (SAIF) and joined the Bank Insurance Fund (BIF).
The recent taxpayer bailout of the thrift system and the losses experienced by the bank insurance fund indicate some of the weaknesses in this safety net.
In a piece of incredible folly, the FDIC voted in September to reverse a modest increase in the premiums banks pay to the FDIC's Bank Insurance Fund.
Clearly, this has placed tremendous strain on the Bank Insurance Fund (BIF).
The sheer number of bank failures and mergers and acquisitions between strong and weak banks since the deregulation legislation of 1980 and 1982 put severe pressure on the solvency of the FDIC's Bank Insurance Fund (BIF).
The cost to the bank insurance fund to cover American Savings Bank losses, the spokesperson said, would be $400 million.
The costly fall of the thrifts, dwindling reserves in the bank insurance fund, and loss of market share to foreign institutions have led to calls for structural change.