In this way, the 1980 increase in deposit insurance to $ exacerbated the fundamental problem facing thrift institutions - a concentration on long-term assets in an environment of high and rising interest rates. Indeed, it significantly increased the taxpayer cost of the bailout of the bankrupt thrift institution deposit insurance fund.
Despite this problematic episode, deposit insurance has clearly played a key - at times even critical role in achieving the stability in banking and financial markets that has characterized the nearly seventy years since its adoption.