Before and After the FDICIA: A Look into Commercial Banking Risk Behavior and Profit

The banking industry in the United States has held many forms and has faced differing su pervision and regulation, especially during the past decade. Beginning in 1991 with the Federal Deposit Insurance Corporation Improvement Act (FDICIA), then the Reigle-Neal Act of 1994, and the Financial Modernization Act (FMA) of 1999, the United States banking structure has undergone several key systematic changes. The rationale for these changes was to accelerate the trend towards a financial system that is more integrated in terms of activities and products. However, there is much debate over these improvements and their effects on bank behavior in regards to risk taking, concentration of power, and the safety of consumers’ monies