27171Federal Register / Vol. 62, No. 96 / Monday, May 19, 1997 / Rules and Regulations
1 An institution that holds BIF-assessable deposits
must also pay an assessment to the Financing
Corporation (FICO) based on those deposits. 12
U.S.C. 1441(f)(2); see Deposit Insurance Funds Act
of 1996 (Funds Act), Pub. L. 104–208, section 2703,
110 Stat. 3009, 3009–479 et seq. (Sept. 30, 1996).
The FICO payment is separate from, and in addition
to, the BIF assessment.
The FDIC will continue to collect the FICO
assessments on the FICO’s behalf. The FDIC’s
quarterly invoices will reflect the current amount of
the FICO assessment.
2 The DRR is a target ratio that has a fixed value
for each year. The default value is 1.25 percent. The
FDIC may set a higher value under certain
Continued
potatoes handled during such fiscal
period; (3) handlers are aware of this
action which was unanimously
recommended by the Committee at a
public meeting and is similar to other
assessment rate actions issued in past
years; and (4) this interim final rule
provides a 30-day comment period, and
all comments timely received will be
considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 947
Marketing agreements, Potatoes,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 947 is amended as
follows:
PART 947—IRISH POTATOES GROWN
IN MODOC AND SISKIYOU COUNTIES,
CALIFORNIA, AND IN ALL COUNTIES
IN OREGON, EXCEPT MALHEUR
COUNTY
1. The authority citation for 7 CFR
part 947 continues to read as follows:
Authority: 7 U.S.C. 601–674.
2. A new § 947.114 is added to
Subpart—Rules and Regulations to read
as follows:
§ 947.114 Fiscal period.
The fiscal period shall begin July 1 of
each year and end June 30 of the
following year, both dates inclusive.
§ 947.247 [Amended]
3. Section 947.247 is amended by
removing the words ‘‘July 1, 1996,’’ and
adding in its place the words ‘‘July 1,
1997,’’ and by removing ‘‘$0.005’’ and
adding in its place ‘‘$0.004.’’
Dated: May 12, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97–12999 Filed 5–16–97; 8:45 am]
BILLING CODE 3410–02–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 327
RIN 3064–AB59
Assessments
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The FDIC is preserving the
current adjusted rate schedule for
assessments paid to the Bank Insurance
Fund (BIF) for the second semiannual
period of 1997 (July–December), and for
subsequent semiannual periods subject
to review on a semiannual basis. Absent
action by the FDIC, the BIF rates would
revert to the base rates, which are 4
basis points higher. The resulting
assessments would exceed the amount
allowed by law.
The FDIC is issuing the final rule
without prior notice and comment
under the procedure established by the
FDIC’s regulations for making limited
adjustments to base assessment rates.
The final rule removes obsolete
provisions regarding the special
assessment and pre-1997 rates, and
clarifies other provisions without
altering their substance.
EFFECTIVE DATE: Effective May 6, 1997.
FOR FURTHER INFORMATION CONTACT: Fred
Carns, Assistant Director, Division of
Insurance, (202) 898–3930; William
Farrell, Chief, Assessment Management
Section, Division of Finance, (202) 416–
7156; Richard Osterman, Senior
Counsel, (202) 898–3523, or Jules
Bernard, Counsel, (202) 898–3731, Legal
Division, Federal Deposit Insurance
Corporation, Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
I. The Final Rule
A. Background
In accordance with section 7(b) of the
Federal Deposit Insurance (FDI Act), 12
U.S.C. 1817(b), the FDIC has adopted a
risk-based assessment program for the
BIF. The program has two main
components. The first component is a
set of base rates that are appropriate for
the BIF over the long term. These rates,
which are presented in the BIF Base
Assessment Schedule, see 12 CFR
327.9(a)(2)(i), will be changed only after
full notice-and-comment rulemaking.
The second component is a mechanism
for making limited and relatively short-
term adjustments to the BIF base rates.
The adjustments are made by
rulemaking without prior notice and
comment, see id. 327.9(c), but are
revisited by the FDIC on a semiannual
basis. The adjusted rates are presented
in the BIF Adjusted Assessment
Schedule. See id. 327.9(b)(2)(i). The
adjusted rates are the effective ones—
that is, the rates that BIF-assessable
institutions currently pay to the BIF.1
The BIF base assessment rates are
appropriate, over the long term, to
generate assessments that maintain the
BIF’s capitalization at the level
prescribed by statute. The base rates
reflect a thorough historical analysis of
FDIC experience, including
consideration of recent statutory
changes that may moderate future
deposit insurance losses (e.g., prompt
corrective action authority and the least-
cost resolution requirement). See 60 FR
42680 (Aug. 16, 1995). The BIF base
rates range from 4 basis points (bp) for
institutions in the best assessment risk
classification (1A institutions) to 31 bp
for institutions in the least favorable
one. The final rule does not alter these
rates.
Over the short term, however, the BIF
base rates would produce a continued
rise in the Bank Insurance Fund reserve
ratio (BIF reserve ratio)—that is, in the
ratio of the BIF’s net worth to the
aggregate estimated deposits that the
BIF insures. See 12 U.S.C. 1817(l)(6).
The BIF reserve ratio is currently above
the target ratio prescribed by statute,
and is rising. (See discussion at I.B.,
below). The FDIC’s Board of Directors
(Board) has therefore adopted a
temporary adjustment to the BIF base
rates. See 61 FR 64609 (Dec. 6, 1996).
The adjustment has lowered the base
rates by 4 bps. The resulting adjusted
rates (which are now in effect) range
from zero to 27 bp.
The adjustment only applies to the
current semiannual period (January-
June 1997), and expires at the end of it.
See 12 CFR 327.9(b)(2)(ii). Absent this
final rule, the effective BIF rates would
revert to the long-term rates set forth in
the BIF Base Assessment Schedule.
The final rule preserves the effective
BIF rates at their current levels for the
second semiannual period of 1997
(July–December) and indefinitely
thereafter. The final rule does so by
making an adjustment to the BIF Base
Assessment Schedule in accordance
with the procedure prescribed in id.
327.9(c). The adjustment lowers the
rates in the BIF Base Assessment
Schedule by four bp. The adjustment is
of indefinite duration, but is reviewed
semiannually.
B. Statutory and Regulatory Framework
for Adjusting the Base Assessment Rates
1. Statutory Provisions
The touchstone for setting a fund’s
assessments is the fund’s reserve ratio.
When that ratio is below the
‘‘designated reserve ratio’’ (DRR),2 the
1 An institution that holds BIF-assessable deposits
must also pay an assessment to the Financing
Corporation (FICO) based on those deposits. 12
U.S.C. 1441(f)(2); see Deposit Insurance Funds Act
of 1996 (Funds Act), Pub. L. 104–208, section 2703,
110 Stat. 3009, 3009–479 et seq. (Sept. 30, 1996).
The FICO payment is separate from, and in addition
to, the BIF assessment.
The FDIC will continue to collect the FICO
assessments on the FICO’s behalf. The FDIC’s
quarterly invoices will reflect the current amount of
the FICO assessment.
2 The DRR is a target ratio that has a fixed value
for each year. The default value is 1.25 percent. The
FDIC may set a higher value under certain
Continued
potatoes handled during such fiscal
period; (3) handlers are aware of this
action which was unanimously
recommended by the Committee at a
public meeting and is similar to other
assessment rate actions issued in past
years; and (4) this interim final rule
provides a 30-day comment period, and
all comments timely received will be
considered prior to finalization of this
rule.
List of Subjects in 7 CFR Part 947
Marketing agreements, Potatoes,
Reporting and recordkeeping
requirements.
For the reasons set forth in the
preamble, 7 CFR part 947 is amended as
follows:
PART 947—IRISH POTATOES GROWN
IN MODOC AND SISKIYOU COUNTIES,
CALIFORNIA, AND IN ALL COUNTIES
IN OREGON, EXCEPT MALHEUR
COUNTY
1. The authority citation for 7 CFR
part 947 continues to read as follows:
Authority: 7 U.S.C. 601–674.
2. A new § 947.114 is added to
Subpart—Rules and Regulations to read
as follows:
§ 947.114 Fiscal period.
The fiscal period shall begin July 1 of
each year and end June 30 of the
following year, both dates inclusive.
§ 947.247 [Amended]
3. Section 947.247 is amended by
removing the words ‘‘July 1, 1996,’’ and
adding in its place the words ‘‘July 1,
1997,’’ and by removing ‘‘$0.005’’ and
adding in its place ‘‘$0.004.’’
Dated: May 12, 1997.
Robert C. Keeney,
Director, Fruit and Vegetable Division.
[FR Doc. 97–12999 Filed 5–16–97; 8:45 am]
BILLING CODE 3410–02–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 327
RIN 3064–AB59
Assessments
AGENCY: Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The FDIC is preserving the
current adjusted rate schedule for
assessments paid to the Bank Insurance
Fund (BIF) for the second semiannual
period of 1997 (July–December), and for
subsequent semiannual periods subject
to review on a semiannual basis. Absent
action by the FDIC, the BIF rates would
revert to the base rates, which are 4
basis points higher. The resulting
assessments would exceed the amount
allowed by law.
The FDIC is issuing the final rule
without prior notice and comment
under the procedure established by the
FDIC’s regulations for making limited
adjustments to base assessment rates.
The final rule removes obsolete
provisions regarding the special
assessment and pre-1997 rates, and
clarifies other provisions without
altering their substance.
EFFECTIVE DATE: Effective May 6, 1997.
FOR FURTHER INFORMATION CONTACT: Fred
Carns, Assistant Director, Division of
Insurance, (202) 898–3930; William
Farrell, Chief, Assessment Management
Section, Division of Finance, (202) 416–
7156; Richard Osterman, Senior
Counsel, (202) 898–3523, or Jules
Bernard, Counsel, (202) 898–3731, Legal
Division, Federal Deposit Insurance
Corporation, Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
I. The Final Rule
A. Background
In accordance with section 7(b) of the
Federal Deposit Insurance (FDI Act), 12
U.S.C. 1817(b), the FDIC has adopted a
risk-based assessment program for the
BIF. The program has two main
components. The first component is a
set of base rates that are appropriate for
the BIF over the long term. These rates,
which are presented in the BIF Base
Assessment Schedule, see 12 CFR
327.9(a)(2)(i), will be changed only after
full notice-and-comment rulemaking.
The second component is a mechanism
for making limited and relatively short-
term adjustments to the BIF base rates.
The adjustments are made by
rulemaking without prior notice and
comment, see id. 327.9(c), but are
revisited by the FDIC on a semiannual
basis. The adjusted rates are presented
in the BIF Adjusted Assessment
Schedule. See id. 327.9(b)(2)(i). The
adjusted rates are the effective ones—
that is, the rates that BIF-assessable
institutions currently pay to the BIF.1
The BIF base assessment rates are
appropriate, over the long term, to
generate assessments that maintain the
BIF’s capitalization at the level
prescribed by statute. The base rates
reflect a thorough historical analysis of
FDIC experience, including
consideration of recent statutory
changes that may moderate future
deposit insurance losses (e.g., prompt
corrective action authority and the least-
cost resolution requirement). See 60 FR
42680 (Aug. 16, 1995). The BIF base
rates range from 4 basis points (bp) for
institutions in the best assessment risk
classification (1A institutions) to 31 bp
for institutions in the least favorable
one. The final rule does not alter these
rates.
Over the short term, however, the BIF
base rates would produce a continued
rise in the Bank Insurance Fund reserve
ratio (BIF reserve ratio)—that is, in the
ratio of the BIF’s net worth to the
aggregate estimated deposits that the
BIF insures. See 12 U.S.C. 1817(l)(6).
The BIF reserve ratio is currently above
the target ratio prescribed by statute,
and is rising. (See discussion at I.B.,
below). The FDIC’s Board of Directors
(Board) has therefore adopted a
temporary adjustment to the BIF base
rates. See 61 FR 64609 (Dec. 6, 1996).
The adjustment has lowered the base
rates by 4 bps. The resulting adjusted
rates (which are now in effect) range
from zero to 27 bp.
The adjustment only applies to the
current semiannual period (January-
June 1997), and expires at the end of it.
See 12 CFR 327.9(b)(2)(ii). Absent this
final rule, the effective BIF rates would
revert to the long-term rates set forth in
the BIF Base Assessment Schedule.
The final rule preserves the effective
BIF rates at their current levels for the
second semiannual period of 1997
(July–December) and indefinitely
thereafter. The final rule does so by
making an adjustment to the BIF Base
Assessment Schedule in accordance
with the procedure prescribed in id.
327.9(c). The adjustment lowers the
rates in the BIF Base Assessment
Schedule by four bp. The adjustment is
of indefinite duration, but is reviewed
semiannually.
B. Statutory and Regulatory Framework
for Adjusting the Base Assessment Rates
1. Statutory Provisions
The touchstone for setting a fund’s
assessments is the fund’s reserve ratio.
When that ratio is below the
‘‘designated reserve ratio’’ (DRR),2 the
27172 Federal Register / Vol. 62, No. 96 / Monday, May 19, 1997 / Rules and Regulations
conditions, but has not exercised that power. See
12 U.S.C. 1817(b)(2)(A)(iv).
3 The FDIC has by regulation interpreted this
provision to embrace institutions that have an
assessment risk classification other than 1A. See 12
CFR 327.10.
4 The FDIC must base a particular institution’s
semiannual assessment on the following factors: (1)
The probability that the institution will cause a loss
to the fund, (2) the likely amount of the loss, and
(3) the fund’s revenue needs. 12 U.S.C.
1817(b)(1)(C). To that end, the FDIC assigns every
institution to an ‘‘assessment risk classification,’’
and sets rates for each of the classifications. See 12
CFR 327.4 and 327.9.
5 The estimated recovery value of closed banks
was $4.34 billion as of December 31, 1996.
FDIC must set assessments to increase
the fund’s reserve ratio to the DRR.
When the reserve ratio is at or above the
DRR—as is now the case for the BIF—
the FDIC must set assessments to
maintain the reserve ratio at the target
DRR. 12 U.S.C. 1817(b)(2)(A)(i). The
FDIC may not generally set assessments
in excess of the amounts needed to meet
these goals. Id. 1817(b)(2)(A)(iii). But
the FDIC may set such assessments for
institutions that exhibit financial,
operational, or compliance weaknesses
or are not well capitalized. Id.
1817(b)(2)(A)(v).3
In order to determine the aggregate
amount to be collected for a fund, the
FDIC must consider: (1) The fund’s
expected operating expenses; (2) the
fund’s case resolution expenditures and
income; (3) the effect of assessments on
the earnings and capital of fund
members; and (4) any other factors that
the FDIC deems appropriate. Id.
1817(b)(2)(A)(ii).4
2. Regulatory Provisions
The FDIC has adopted a special
procedure for making limited and
relatively short-term adjustments to a
fund’s base rates in order to maintain
the fund’s reserve ratio at the target
DRR. See 12 CFR 327.9(c).
Adjustments are subject to strict
constraints. An adjustment must apply
uniformly to every rate in the base
assessment schedule. No adjustment
may, when aggregated with prior
adjustments, cause the adjusted rates to
deviate at any time from the base rates
by more than 5 bp. No one adjustment
may constitute an increase or decrease
of more than 5 bp. And no adjustment
may result in a negative assessment rate.
Id. 327.9(c)(1).
In line with the statutory
requirements for setting assessments, an
adjustment is determined by (1) the
amount of assessment revenue
necessary to maintain the fund’s reserve
ratio at the DRR, and (2) the assessment
schedule that would provide the
amount so needed considering the risk
profile of the institutions that pay
assessments to the fund. Id. To
determine the assessment revenue
needed for a fund, the FDIC considers
the fund’s expected operating expenses,
its case resolution expenditures and
income, the effect of assessments on the
earnings and capital of the institutions
paying assessments to the fund, and any
other relevant factors. Id. 327.9(c)(2).
C. The BIF Adjusted Assessment
Schedule
For the reasons given below, the FDIC
considers that there is no current need
for assessment income to maintain the
BIF’s reserve ratio at the target DRR.
Accordingly, the final rule adjusts the
rates in the BIF Base Assessment
Schedule by lowering each rate 4 bp,
effective July 1, 1997, thereby retaining
the rates currently in effect. The
adjusted rates are as follows:
BIF ADJUSTED ASSESSMENT SCHEDULE
Capital group Supervisory subgroup
A B C
1 .................................................................................................................................................................................. 0 3 17
2 .................................................................................................................................................................................. 3 10 24
3 .................................................................................................................................................................................. 10 24 27
1. Maintaining the BIF Reserve Ratio
at the Target DRR. As of December 31,
1996 (unaudited), the latest date for
which complete data are available, the
BIF had a balance of $26.854 billion (see
Table 3) and a reserve ratio of 1.34
percent. The industry’s performance in
recent months has been strong; the
growth of the BIF reserve ratio has been
robust. Accordingly, the near-term
outlook for the BIF reserve ratio is
favorable.
Expected operating expenses.
Operating expenses were approximately
$505 million during 1996. They
averaged $42 million per month for the
year, but increased to an average of $55
million per month during the last
quarter of 1996 (a full-year equivalent
figure of $656 million). For 1997,
operating expenses are projected to be
$652 million. The savings from
corporate downsizing is offset by a
higher allocation of overhead expenses
to corporate, a result of fewer
receiverships.
Case resolution expenditures and
income. Expected case resolution
expenditures and income are reflected
in projected insurance losses, which
consist of two components: a contingent
liability for future failures, and an
allowance for losses on institutions that
have already failed. Using the FDIC’s
current estimates of failed-bank assets
and a 20 percent loss rate on such
assets, the change in the contingent
liability for future failures is estimated
to be between $100 million (low
estimate) and $300 million (high
estimate) for calendar year 1997.
While annual changes in the
allowance for losses on past failures, as
a percent of the estimated net recovery
value of closed banks,5 have been as
high as +13 percent and as low as ¥16
percent over the last five years, the
change in 1994 was ¥5.75 percent ,
+10.2 percent in 1995, and ¥3.0 percent
in 1996. An estimated range of +5
percent to ¥5 percent was used in the
projections detailed below.
Table 1 summarizes the effect of these
assumptions on projections of the
provision for losses:
TABLE 1.—CHANGES IN CONTINGENT
LIABILITIES AND ALLOWANCE FOR
LOSSES (1)
Low loss
estimate
(million)
High loss
estimate
(million)
Contingent Li-
ability for Fu-
ture Cases ..... $100 $300
Allowance for
Losses:
Closed Banks
(2) .................. (200) 200
Total Provision
for Losses ...... (100) 500
Notes:
(1) Both projections assume a continuation
of current economic conditions during 1997.
(2) Assumes a range of ¥5 percent to +5
percent of the estimated net recovery value of
closed banks ($4.34 billion as of 12/31/96).
conditions, but has not exercised that power. See
12 U.S.C. 1817(b)(2)(A)(iv).
3 The FDIC has by regulation interpreted this
provision to embrace institutions that have an
assessment risk classification other than 1A. See 12
CFR 327.10.
4 The FDIC must base a particular institution’s
semiannual assessment on the following factors: (1)
The probability that the institution will cause a loss
to the fund, (2) the likely amount of the loss, and
(3) the fund’s revenue needs. 12 U.S.C.
1817(b)(1)(C). To that end, the FDIC assigns every
institution to an ‘‘assessment risk classification,’’
and sets rates for each of the classifications. See 12
CFR 327.4 and 327.9.
5 The estimated recovery value of closed banks
was $4.34 billion as of December 31, 1996.
FDIC must set assessments to increase
the fund’s reserve ratio to the DRR.
When the reserve ratio is at or above the
DRR—as is now the case for the BIF—
the FDIC must set assessments to
maintain the reserve ratio at the target
DRR. 12 U.S.C. 1817(b)(2)(A)(i). The
FDIC may not generally set assessments
in excess of the amounts needed to meet
these goals. Id. 1817(b)(2)(A)(iii). But
the FDIC may set such assessments for
institutions that exhibit financial,
operational, or compliance weaknesses
or are not well capitalized. Id.
1817(b)(2)(A)(v).3
In order to determine the aggregate
amount to be collected for a fund, the
FDIC must consider: (1) The fund’s
expected operating expenses; (2) the
fund’s case resolution expenditures and
income; (3) the effect of assessments on
the earnings and capital of fund
members; and (4) any other factors that
the FDIC deems appropriate. Id.
1817(b)(2)(A)(ii).4
2. Regulatory Provisions
The FDIC has adopted a special
procedure for making limited and
relatively short-term adjustments to a
fund’s base rates in order to maintain
the fund’s reserve ratio at the target
DRR. See 12 CFR 327.9(c).
Adjustments are subject to strict
constraints. An adjustment must apply
uniformly to every rate in the base
assessment schedule. No adjustment
may, when aggregated with prior
adjustments, cause the adjusted rates to
deviate at any time from the base rates
by more than 5 bp. No one adjustment
may constitute an increase or decrease
of more than 5 bp. And no adjustment
may result in a negative assessment rate.
Id. 327.9(c)(1).
In line with the statutory
requirements for setting assessments, an
adjustment is determined by (1) the
amount of assessment revenue
necessary to maintain the fund’s reserve
ratio at the DRR, and (2) the assessment
schedule that would provide the
amount so needed considering the risk
profile of the institutions that pay
assessments to the fund. Id. To
determine the assessment revenue
needed for a fund, the FDIC considers
the fund’s expected operating expenses,
its case resolution expenditures and
income, the effect of assessments on the
earnings and capital of the institutions
paying assessments to the fund, and any
other relevant factors. Id. 327.9(c)(2).
C. The BIF Adjusted Assessment
Schedule
For the reasons given below, the FDIC
considers that there is no current need
for assessment income to maintain the
BIF’s reserve ratio at the target DRR.
Accordingly, the final rule adjusts the
rates in the BIF Base Assessment
Schedule by lowering each rate 4 bp,
effective July 1, 1997, thereby retaining
the rates currently in effect. The
adjusted rates are as follows:
BIF ADJUSTED ASSESSMENT SCHEDULE
Capital group Supervisory subgroup
A B C
1 .................................................................................................................................................................................. 0 3 17
2 .................................................................................................................................................................................. 3 10 24
3 .................................................................................................................................................................................. 10 24 27
1. Maintaining the BIF Reserve Ratio
at the Target DRR. As of December 31,
1996 (unaudited), the latest date for
which complete data are available, the
BIF had a balance of $26.854 billion (see
Table 3) and a reserve ratio of 1.34
percent. The industry’s performance in
recent months has been strong; the
growth of the BIF reserve ratio has been
robust. Accordingly, the near-term
outlook for the BIF reserve ratio is
favorable.
Expected operating expenses.
Operating expenses were approximately
$505 million during 1996. They
averaged $42 million per month for the
year, but increased to an average of $55
million per month during the last
quarter of 1996 (a full-year equivalent
figure of $656 million). For 1997,
operating expenses are projected to be
$652 million. The savings from
corporate downsizing is offset by a
higher allocation of overhead expenses
to corporate, a result of fewer
receiverships.
Case resolution expenditures and
income. Expected case resolution
expenditures and income are reflected
in projected insurance losses, which
consist of two components: a contingent
liability for future failures, and an
allowance for losses on institutions that
have already failed. Using the FDIC’s
current estimates of failed-bank assets
and a 20 percent loss rate on such
assets, the change in the contingent
liability for future failures is estimated
to be between $100 million (low
estimate) and $300 million (high
estimate) for calendar year 1997.
While annual changes in the
allowance for losses on past failures, as
a percent of the estimated net recovery
value of closed banks,5 have been as
high as +13 percent and as low as ¥16
percent over the last five years, the
change in 1994 was ¥5.75 percent ,
+10.2 percent in 1995, and ¥3.0 percent
in 1996. An estimated range of +5
percent to ¥5 percent was used in the
projections detailed below.
Table 1 summarizes the effect of these
assumptions on projections of the
provision for losses:
TABLE 1.—CHANGES IN CONTINGENT
LIABILITIES AND ALLOWANCE FOR
LOSSES (1)
Low loss
estimate
(million)
High loss
estimate
(million)
Contingent Li-
ability for Fu-
ture Cases ..... $100 $300
Allowance for
Losses:
Closed Banks
(2) .................. (200) 200
Total Provision
for Losses ...... (100) 500
Notes:
(1) Both projections assume a continuation
of current economic conditions during 1997.
(2) Assumes a range of ¥5 percent to +5
percent of the estimated net recovery value of
closed banks ($4.34 billion as of 12/31/96).