Losses may accrue to depositors at insolvent banks both at and after the time of official resolution. Losses at resolution occur because of poor closure rules and regulatory forbearance. Losses after resolution occur if depositors' access to their claims is delayed or "frozen." While the sources and implications of losses at resolution have been analyzed previously, the sources and implications of losses after resolution have received little attention. This paper examines the causes of delayed depositors' access to their funds at resolved banks, describes how the FDIC provides immediate access, reports on a special survey of access practices in other countries, and analyzes the costs and benefits of delayed access in terms of both the effects on market discipline and depositor pressure to protect all deposits.
necessary information on what balances and which depositors are insured and on estimates of recovery values, as well as the ability to establish paying agents quickly. The information on eligible insured deposits is complex because of, among other things, poor and/or non-computerized records, and depositorownership of multiple accounts at the same bank. These obstacles provide a physical rather than a policy reason for not providing immediate and full access to both protected and unprotected depositors.
Before the establishment of the FDIC in 1934, depositors at failed