Summary: In this testimony, the Comptroller General discusses the following key safety and soundness provisions of the landmark Federal Deposit Insurance Corporation Improvement Act of 1991: (1) the condition of the banking and thrift industries and the funds that insure them; (2) two concerns being raised prominently today--the volume of bank lending and regulatory burden; and (3) the implications of all of this for congressional oversight and the legislative agenda for banking. GAO's overriding message is the importance of following through on the implementation of the key safety and soundness provisions of the 1991 legislation. Much remains to be done to realize the act's potential to help both the industry and the deposit insurance system regain sound financial footing. The banking industry reported strong earnings performance in the first nine months of 1992, and welcome signs exist that the health of much of the industry is improving. Even so, the future of both the economy and the banking system remains uncertain. Furthermore, the deposit insurance funds for both banks and thrifts are severely undercapitalized.
