5423caca_FDIC__2004_Annual_Report__Challenge
[No.] 2 [Brief Description] A primary goal of the FDIC under its insurance program is to ensure that its deposit insurance funds do not require augmentation by the U.S. Treasury. Achieving this goal is a considerable challenge that requires effective communication and coordination with the other federal banking agencies. The FDIC engages in an ongoing process of proactively identifying risks to the deposit insurance funds and adjusting the risk-based deposit insurance premiums charged to the institutions. The consolidations that have occurred among banks, securities firms, insurance companies, and other financial services providers resulting from the Gramm-Leach-Bliley Act (GLBA) pose additional risks to the FDIC�s insurance funds. Large banks may pose greater risks to the insurance funds as a result of the Basel II capital accord, which aims to align capital reserves more closely with the risks faced by banks and thrifts operating internationally. Basel II can result in reduced capital requirements at large institutions and increase competitive pressure on smaller institutions. Basel II will have far-reaching effects on the management and supervision of the largest, most complex banking organizations in the world. The United States has an important role in Basel II implementation because it supervises more bank assets than the other accord participants. [Challenge] 
Management and Analysis of Risks to the Insurance Funds
FDIC: 2004 Annual Report