Statement by
FDIC Chairman Martin J. Gruenberg
On
Notice of Proposed Rulemaking
On
Raising DIF Reserve Ratio to 1.35 Percent
October 22, 2015
In 2010, Congress in the Dodd-Frank Act raised the minimum reserve ratio for the
deposit insurance fund from 1.15 percent to 1.35 percent and required that the reserve
ratio reach the new minimum by September 30, 2020. The Act also provided that
institutions with $10 billion or more in assets would be responsible for closing the gap
between 1.15 percent and 1.35 percent.
As we just heard, FDIC staff projects that the reserve ratio will likely reach 1.15 percent
in early 2016. The FDIC Board therefore is today considering a proposal to raise the
reserve ratio to 1.35 percent as required by law.
It is worth noting that, in 2011, when the Board adopted the current assessment rates, it
also provided for lower regular assessment rates for all institutions when the reserve
ratio reaches 1.15 percent. Under that existing rule, average assessments for
institutions with less than $10 billion in assets will be reduced by nearly 30 percent. The
proposal under consideration today would impose a 4.5 basis point surcharge on
institutions with $10 billion or more in assets to bring the reserve ratio up to the
statutorily required level.
The FDIC expects that eight quarters of surcharges would be required to bring the
reserve ratio to 1.35 percent.
This proposal takes a balanced approach. A large majority of institutions will have
substantially reduced assessments according to the 2011 rule. The assessment
surcharges on large institutions would be spread out over time and should be fully
manageable for the institutions. By aiming to reach the minimum reserve ratio ahead of
the statutory deadline, this approach reduces the risk that the FDIC would have to raise
rates unexpectedly in the event of a future period of stress and should allow the FDIC to
maintain stable and predictable assessments.
I’d like to thank staff for their hard work on this proposal. I support the proposal and look
forward to receiving comments.
Press Release: FDIC Board Adopts Proposed Rule to Increase Deposit Insurance Fund
To Statutorily Required Level
Last Updated 10/22/2015
FDIC Chairman Martin J. Gruenberg
On
Notice of Proposed Rulemaking
On
Raising DIF Reserve Ratio to 1.35 Percent
October 22, 2015
In 2010, Congress in the Dodd-Frank Act raised the minimum reserve ratio for the
deposit insurance fund from 1.15 percent to 1.35 percent and required that the reserve
ratio reach the new minimum by September 30, 2020. The Act also provided that
institutions with $10 billion or more in assets would be responsible for closing the gap
between 1.15 percent and 1.35 percent.
As we just heard, FDIC staff projects that the reserve ratio will likely reach 1.15 percent
in early 2016. The FDIC Board therefore is today considering a proposal to raise the
reserve ratio to 1.35 percent as required by law.
It is worth noting that, in 2011, when the Board adopted the current assessment rates, it
also provided for lower regular assessment rates for all institutions when the reserve
ratio reaches 1.15 percent. Under that existing rule, average assessments for
institutions with less than $10 billion in assets will be reduced by nearly 30 percent. The
proposal under consideration today would impose a 4.5 basis point surcharge on
institutions with $10 billion or more in assets to bring the reserve ratio up to the
statutorily required level.
The FDIC expects that eight quarters of surcharges would be required to bring the
reserve ratio to 1.35 percent.
This proposal takes a balanced approach. A large majority of institutions will have
substantially reduced assessments according to the 2011 rule. The assessment
surcharges on large institutions would be spread out over time and should be fully
manageable for the institutions. By aiming to reach the minimum reserve ratio ahead of
the statutory deadline, this approach reduces the risk that the FDIC would have to raise
rates unexpectedly in the event of a future period of stress and should allow the FDIC to
maintain stable and predictable assessments.
I’d like to thank staff for their hard work on this proposal. I support the proposal and look
forward to receiving comments.
Press Release: FDIC Board Adopts Proposed Rule to Increase Deposit Insurance Fund
To Statutorily Required Level
Last Updated 10/22/2015