By Nancy Raiden Titus Journal Record Staff Reporter ``The
commerical banking industry in Oklahoma is alive and well,'' Bruce
T. Benbrook, president of the Oklahoma Bankers Association, told
reporters at a news conference Monday to counter recent negative
publicity concerning the health of the Federal Deposit Insurance
``It is not news to say that if a major money-center bank fails,
the bank insurance fund would be broke. Everyone knows that $200
billion in deposits at such a large bank, for example, is more than
$13 billion in the insurance fund,'' he said.
Benbrook referred to media and congressional attention generated
as a result of a General Accounting Office report given last week
that indicated a possible collapse of the FDIC if even one major
money-center bank failed.
Benbrook said several things were left out of that report,
including the fact 90 percent of the nation's banks showed a second
quarter profit - 88 percent of Oklahoma banks were profitable in the
second quarter - and that recent changes will require banks to pay
an additional $5 billion to shore up the fund in 1991.
He said banks have been required to pay premiums of 8.5 cents
for every $100 in deposits. Next year the amount will be 19.5 cents
for every $100, an increase of 129 percent.
The increases will mean Oklahoma banks will pay about $45
million in 1991, which represents an increase of 47 percent or $17
million over 1990, Benbrook said.
Benbrook added that the additional expenses for banks caused by
increased premiums would have to be made up, so the consumer will
probably feel it somewhere, such as increased interest rates on
``Banks are willing to do their share,'' he said. ``But
increasing deposit insurance premiums alone is not the solution.
What is needed is reform of the system in such a way that all
providers of financial services to consumers, including credit
unions, can be treated by similar, bank-like rules so that the
savings and loan fiasco can never be repeated again.''
Benbrook pointed to five differences between banks and savings
First, he said banks have a diversified earnings base while
savings and loans have concentrated holdings in real estate and
long-term home mortgages.
Second, he called a bank regulators' insistence on adequate
capital levels the ``first line of defense'' and said capital
requirements for savings and loans were weak.
Third, he said savings and loans were allowed to use permissive
accounting standards while banks have been held to strict standards. …