Editor's Note: This is a monthly publication on economic trends and financial policy issues. In this publication you can read "The Longbrake Letter", an analysis of economic trends and conditions written by Bill Longbrake, as well as commentary on financial regulation and policy written by members of the law firm Barnett, Sivon & Natter, P.C., a Washington, DC based law firm that specializes in financial services law.

ISSUE: #05, September 2010

The Longbrake Letter
- Bill Longbrake
Slowly but surely more and more are coming to accept the view that economic recovery is likely to be muted, growth will be anemic and unemployment will remain high for an extended period of time. In this month's economic letter Bill Longbrake discusses why economic recovery will be weak and why policymakers can do little to accelerate recovery but rather must focus on avoiding a new recession. The evolving political situation will make this task more challenging.

A Better Approach to Deposit Insurance
- Bob Barnett
Suggestions have been made that deposit insurance should be divided into two funds, one for large banks and one for small. This article suggests another way to proceed -- to cover deposits in smaller banks with DIF and those in larger banks through the resolution authority, with individual account coverage the same as under DIF.

Another Approach to Financial Literacy is Needed
- Jim Sivon
The financial crisis demonstrates a need for a new approach to financial literacy.

Should Capital Be King?
- Raymond Natter
Congress and the regulators have focused on increasing regulatory capital in order to prevent another financial crisis. But capital is a two-edged sword, and excessive capital requirements can have negative consequences for the institution and for the economy. This article explains why a balanced approach is necessary when determining minimum required capital ratios.