The Value of Examiner Asset Classifications: Protecting Uninsured Depositors and Creditors Since 1863

Abstract

Since the 1863 start of the national system of federally chartered banks, the examiners of the Office of the Comptroller (OCC) have evaluated the quality of bank assets to ensure the solvency of those institutions. For the 70 years before the Federal Deposit Insurance Corporation (FDIC) was established in 1933, these evaluations were an important means of protecting uninsured depositors and creditors from losses. This analysis examines whether the classifications of assets in insolvent banks reflected the losses borne by depositors and creditors.

Author

Roger Tufts, Graham Tufts