By type of deposit account, the range in percentage of deposits insured is even larger than for the various groups of banks. Nearly half of the demand deposits of individuals, partnerships, and corporations, and 94 percent of their savings and time deposits, are insured, whereas less than 10 percent of government and interbank deposits are insured. About two-fifths of other types of deposits are insured.

Table 35. RATIOS INDICATING DISTRIBUTION OF CONTINGENT LIABILITY AND CONCENTRATION OF RISK TO THE FEDERAL DEPOSIT INSURANCE CORPORATION SEPTEMBER 19, 1951

ALL INSURED BANKS GROUPED BY AMOUNT OF DEPOSITS, POPULATION OF CENTER, CLASS, AND PROPORTION OF DEPOSITS INSURED; AND ACCOUNTS GROUPED BY TYPE

In Table 35 four types of ratios are given which relate to the distribution of the contingent liability and concentration of the risk which is incurred by the Corporation in providing deposit insurance. These ratios show the percentages of the total number of insured banks, total insured deposits, total deposit liabilities of the insured banks, and total number of accounts, in the various groups of banks and accounts given in the preceding tables. The distributions of insured deposits among various groups of banks and by type of account are shown in Chart S.

Chart S. PERCENTAGE DISTRIBUTIONS OF INSURED DEPOSITS, September 19, 1951, BY SIZE OF BANK, POPULATION OF CENTER, CLASS OF Bank,

Nearly 6 percent of total insured deposits are in the three largest insured banks. Slightly more than 42 percent of all insured deposits are in less than 2 percent of the banks, those with deposits of more than $100 million each. There is also a concentration of insured deposits in the large cities. One-fifth of all insured deposits are in the banks located in the two cities with more than two and a half million population.

There is also a concentration of insured deposits in banks which are not subject to regular examination by the Corporation. Two-thirds. of the insured deposits are in banks which are members of the Federal Reserve System: these banks are not examined by the Corporation except in unusual circumstances.

The risks of the Corporation are not always in direct proportion to the amount of insured deposits. Banks with a large proportion of their deposits uninsured generally hold large amounts of interbank deposits: a receivership of such a bank will cause difficulties in other banks and thus is likely to result in more loss to the Corporation than failure of a smaller bank with the same amount of insured deposits. Consequently, the distribution of total deposits in insured banks has an important bearing on the potential liability and risk of the Corporation. Total deposits are more highly concentrated than insured deposits in the large banks, in banks in large cities, and in the banks which are not regularly examined by the Corporation.

The distributions of total deposits and of insured deposits also differ when deposits are classified by type of account. One-half of the insured deposits are in the savings and time accounts of individuals, partnerships, and corporations, though only three-tenths of total deposits are of this type. More than half of all deposits are in the demand accounts of individuals, partnerships, and corporations, but somewhat less than half of the insured deposits. Government and interbank deposits, taken together, make up 15 percent of all deposits, but the insured portions of these accounts are only 2 percent of total insured deposits.

Distributions of the total number of deposit accounts among the various groups of banks indicate the relative number of depositors whose accounts are fully or partially protected. The accounts show less concentration in the large banks and the large cities than the total deposits or the insured deposits.

IMPACT OF INCREASE IN INSURANCE COVERAGE

In the special call in 1951 and in four previous calls (1938, 1941, 1945, and 1949) information regarding the number of accounts and the amount of deposits was obtained for four size-groups of accounts: accounts of $5,000 or less, $5,000 to $10,000, $10,000 to $25,000, and more than $25,000. In the calls prior to 1951 the purpose of obtaining information for accounts from $5,000 to $10,000 and for accounts from $10,000 to $25,000 was to provide a basis for estimating the effect of increasing deposit insurance coverage to $10,000 or to $25,000.

Information regarding accounts from $10,000 to $25,000 was collected in 1951 for the same reason as for the previous call dates. However, since insurance coverage had already been increased to $10,000, information for accounts under $5,000, and for accounts from $5,000 to $10,000, was obtained for the purpose of comparing the distribution of deposit accounts by size in 1951 with that for preceding dates. The call in 1951 was made approximately one year after the increase in coverage to $10,000 and the call in 1949 approximately one year prior to the increase.

In Table 36 a comparison is made of the number of accounts fully protected and the amount of insured deposits under coverages of $5,000 and $10,000 for each depositor, as computed from the reports by the banks for September 19, 1951, and for four preceding special call dates. In Chart T the amount of insured deposits on each of the special call dates is shown, together with the estimated amount that would have been insured in 1951 with $5,000 coverage and the estimated amount that would have been insured with $10,000 coverage at the time of preceding call dates.

Table 36. FULLY PROTECTED ACCOUNTS AND INSURED DEPOSITS UNDER
INSURANCE Coverage of $5,000 AND $10,000 RESPECTIVELY, ALL
INSURED BANKS, SPECIAL CALL DATES, 1938 TO 1951

1 This was the maximum insurance for each depositor prior to 1950.

2 This is the maximum insurance for each depositor in effect since September 21, 1950. 'Computed by dividing the percentage change from one call to the next by the number of years between the call dates. Data for May 13, 1936, used in computing the 1936 to 1938 percentage change are as follows: total number of accounts, 58,785 thousand; accounts fully protected, 57,817 thousand; total deposits, $46,168 million; and insured deposits $20,456 million. On the first special call date, October 1, 1934, total deposits were $37,026 million, and insured deposits $16,455 million. Not available.

The figures for accounts show that with either coverage limit there would have been an increase in the number of accounts fully protected from each call date to the next, but a decrease in all cases in the percentage of accounts fully protected. When the changes are adjusted for the number of years intervening between the successive special call

dates, the changes from 1949 to 1951, as computed for either coverage limit, were similar to those during the preceding 4-year period, and to those during the 3-year period from 1938 to 1941.

The figures for deposits show that with either the $5,000 maximum or the $10,000 maximum insurance for each depositor the percentage of deposits insured would have decreased from 1938 to 1941, increased from 1941 to 1949, and decreased from 1949 to 1951. In 1951, with $10,000 coverage, 54.3 percent of deposits were insured, which compares with 56.4 percent that would have been insured in 1949 under this maximum.

Table 37 shows how many additional bank accounts would be fully protected, and how large an amount of deposits would become insured, as of the survey date in 1951, by raising the insurance coverage from the present maximum to $25,000 for each depositor, or to all deposits, and compares the results with the difference between $5,000 and $10,000 coverage. These effects are shown for all insured banks, and also for banks grouped by amount of deposits, population of center where located, and class, and for accounts grouped by type.