PRESS RELEASE
Federal Deposit Insurance Corporation Each Depositor insured to at least $250,000
FOR IMMEDIATE RELEASE
May 17, 2009
Media Contact:
David Barr (202) 898-6992
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking
system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to
which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-41-2009
FDIC Extends the Debt Guarantee Component of Its
Temporary Liquidity Guarantee Program
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today
voted to extend the debt guarantee portion of the Temporary Liquidity Guarantee
Program (TLGP) from June 30, 2009 through October 31, 2009, and to impose a
surcharge on debt issued with a maturity of one-year or more beginning in the second
quarter to gradually phase-out the program.
"The TLGP has been effective in improving short-term and intermediate-term funding for
banking organizations, but liquidity in the financial markets has not returned to pre-crisis
levels," said FDIC Chairman Sheila C. Bair. "The extension will reduce the potential for
market disruption when the TLGP ends and should provide a gradual phase-out period
as institutions return to reliance on the private, non-guaranteed debt markets."
With the extension, all insured depository institutions and those additional participants,
such as holding companies, that have actively participated in the debt guarantee portion
of the TLGP (by issuing guaranteed debt before April 1, 2009) may continue to issue
guaranteed debt through October 31, 2009, without application. The guarantee on debt
issued before April 1, 2009, will expire no later than June 30, 2012. The guarantee on
debt issued on or after April 1, 2009, will expire no later than December 31, 2012.
Participants that are not insured depository institutions and that have not issued FDIC-
guaranteed debt before April 1, 2009 must apply by June 30, 2009, if they wish to issue
guaranteed debt after that date. If the application is approved, the guarantee on debt
issued on or after April 1, 2009, will expire no later than December 31, 2012.
The Board of Directors also voted to impose surcharges on guaranteed debt that has a
maturity of one year or more and is issued on or after April 1, 2009. For guaranteed
debt that is issued by June 30, 2009, and matures by June 30, 2012, the surcharge will
be 10 basis points (on an annualized basis) for an insured depository institution and 20
basis points (on an annualized basis) for all others. For all other guaranteed debt that
Federal Deposit Insurance Corporation Each Depositor insured to at least $250,000
FOR IMMEDIATE RELEASE
May 17, 2009
Media Contact:
David Barr (202) 898-6992
Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking
system. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to
which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.
FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically
(go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information
Center (877-275-3342 or 703-562-2200). PR-41-2009
FDIC Extends the Debt Guarantee Component of Its
Temporary Liquidity Guarantee Program
The Board of Directors of the Federal Deposit Insurance Corporation (FDIC) today
voted to extend the debt guarantee portion of the Temporary Liquidity Guarantee
Program (TLGP) from June 30, 2009 through October 31, 2009, and to impose a
surcharge on debt issued with a maturity of one-year or more beginning in the second
quarter to gradually phase-out the program.
"The TLGP has been effective in improving short-term and intermediate-term funding for
banking organizations, but liquidity in the financial markets has not returned to pre-crisis
levels," said FDIC Chairman Sheila C. Bair. "The extension will reduce the potential for
market disruption when the TLGP ends and should provide a gradual phase-out period
as institutions return to reliance on the private, non-guaranteed debt markets."
With the extension, all insured depository institutions and those additional participants,
such as holding companies, that have actively participated in the debt guarantee portion
of the TLGP (by issuing guaranteed debt before April 1, 2009) may continue to issue
guaranteed debt through October 31, 2009, without application. The guarantee on debt
issued before April 1, 2009, will expire no later than June 30, 2012. The guarantee on
debt issued on or after April 1, 2009, will expire no later than December 31, 2012.
Participants that are not insured depository institutions and that have not issued FDIC-
guaranteed debt before April 1, 2009 must apply by June 30, 2009, if they wish to issue
guaranteed debt after that date. If the application is approved, the guarantee on debt
issued on or after April 1, 2009, will expire no later than December 31, 2012.
The Board of Directors also voted to impose surcharges on guaranteed debt that has a
maturity of one year or more and is issued on or after April 1, 2009. For guaranteed
debt that is issued by June 30, 2009, and matures by June 30, 2012, the surcharge will
be 10 basis points (on an annualized basis) for an insured depository institution and 20
basis points (on an annualized basis) for all others. For all other guaranteed debt that
utilizes the extension (either through a maturity after June 30, 2012, or through issuance
after June 30, 2009), the surcharge will be 25 basis points (annualized) for an insured
depository institution and 50 basis points (annualized) for all others.
Surcharges will be will be in addition to current fees for guaranteed debt and deposited
into the Deposit Insurance Fund (DIF) instead of being set aside to cover potential TLG
program losses.
"The surcharges recognize that a relatively small portion of the industry is actively using
the debt guarantee, but all insured depository institutions ultimately bear the risks
associated with this program," noted Chairman Bair. "Putting the surcharges in the DIF
will bolster the reserves that support our regular insurance program. Surcharge
revenues collected in the second quarter, combined with Congressional action to
increase our borrowing authority, should enable the FDIC to meaningfully reduce the 20
basis point special assessment proposed by the board on February 27th." noted
Chairman Bair.
The TLGP, which the FDIC created in October 2008, is part of a coordinated effort by
the FDIC, the U.S. Department of the Treasury, and the Federal Reserve to remedy
unprecedented disruptions in credit markets and the resultant inability of financial
institutions to fund themselves and make loans to creditworthy borrowers.
# # #
Attachment: Board Meeting Documents
after June 30, 2009), the surcharge will be 25 basis points (annualized) for an insured
depository institution and 50 basis points (annualized) for all others.
Surcharges will be will be in addition to current fees for guaranteed debt and deposited
into the Deposit Insurance Fund (DIF) instead of being set aside to cover potential TLG
program losses.
"The surcharges recognize that a relatively small portion of the industry is actively using
the debt guarantee, but all insured depository institutions ultimately bear the risks
associated with this program," noted Chairman Bair. "Putting the surcharges in the DIF
will bolster the reserves that support our regular insurance program. Surcharge
revenues collected in the second quarter, combined with Congressional action to
increase our borrowing authority, should enable the FDIC to meaningfully reduce the 20
basis point special assessment proposed by the board on February 27th." noted
Chairman Bair.
The TLGP, which the FDIC created in October 2008, is part of a coordinated effort by
the FDIC, the U.S. Department of the Treasury, and the Federal Reserve to remedy
unprecedented disruptions in credit markets and the resultant inability of financial
institutions to fund themselves and make loans to creditworthy borrowers.
# # #
Attachment: Board Meeting Documents