"The things that are needed are........cash, courage, and good friends."

We have come quite a distance from those days and that advice. In response to the 2008 banking crisis, the FDIC increased basic deposit insurance coverage from $100,000 to $250,000 per account and provided temporary unlimited coverage to domestic, noninterest bearing transaction accounts. Such actions provided liquidity to the banking system and instilled the depositor confidence necessary to prevent large scale disintermediation. However, the negative consequence of those actions was a heightened level in the presence of moral hazard.

The 1993 report to Congress on the origins and causes of the savings and loan debacle, by the National Commission on Financial Institutions Reform, Recovery, and Enforcement, stated:

"Above all, deposit insurance of the kind provided gave the industry incentives to assume risks that would not have been taken by firms responsible for the consequences of their actions."

Had that warning been heeded many of today's economic problems could have been avoided. Clearly, we cannot, as a nation, tamper with FDIC Insurance in the current environment. We now must focus upon enlightened regulation that permits healthy banks and thrifts to provide credit in a prudent manner and that impedes only the operations of demonstrated high risk takers, whose actions work against the interest of U.S. taxpayers, the ultimate guarantor of bank deposits.

Just as professional bankers know that bad loans are made during good times, legislators and regulators need to take advantage of the eventual return of good times to heed those words of the National Commission on Financial Institutions Reform, Recovery, and Enforcement by modifying FDIC coverage and thereby reducing the dangers of moral hazard. Only by so doing, will our nation be able to avoid these repeated crises that are so painful to our economy.

That document states, on page number 3, "Above all, deposit insurance of the kind provided gave the industry incentives to assume risks that would not have been taken by firms responsible for the consequences of their actions."

Had deposit insurance reform been implemented in 1993, at the time the referenced report was published, the current crisis might have been averted. However had coverage not been expanded as the present banking crisis unfolded, our nation's financial system would likely have collapsed. When economic conditions return to normal Deposit Insurance coverage must be re-examined.