The US Federal Deposit Insurance Corporation (FDIC) responsibilities span three key regulatory functions - banking regulation and supervision, resolution and receivership, and bank deposit insurance - a feature seldom found on the international scene and in stark contrast to the European framework. In addition, the FDIC's accumulated experience in bank failure management makes this institution a point of reference in the ongoing debate on possible reforms of the European Union bank crisis management framework and deposit insurance scheme.
The analysis of the US regulatory framework and the FDIC experience highlights four main factors that explain its superior performance, when compared to that of the European Banking Union: (a) the concentration of different functions into one authority; (b) the presence of a single framework for banking resolution flexibly applicable to all banks, regardless of their size; (c) the possibility to use the deposit insurance fund to protect also uninsured deposits, under the least cost principle, when - as part of purchase & assumption transactions - it allows for a reduction of fund disbursements; (d) the absence of antitrust constraints.
