PRESS RELEASE
Federal Deposit Insurance Corporation Each Depositor insured to at least $250,000
FOR IMMEDIATE RELEASE
April 12, 2011
Media Contact:
Andrew Gray (202) 898 -7192
angray@fdic.gov
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-66-2011
FDIC Announces Updated Deposit Insurance Fund Loss and Reserve Ratio
Projections
Projects Positive Fund by This Year
The Federal Deposit Insurance Corporation (FDIC) today updated its loss, income, and
reserve ratio projections for the Deposit Insurance Fund (DIF) over the next several
years. The projected cost of FDIC-insured institution failures for the five-year period
from 2011 through 2015 is $21 billion, compared to estimated losses of $24 billion for
banks that failed in 2010 alone. While these loss projections are subject to considerable
uncertainty, under these projections and current assessment rates, the fund should
become positive this year and reach 1.15 percent of estimated insured deposits in 2018.
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that the
fund reserve ratio reach 1.35 percent by September 30, 2020. The FDIC anticipates that
it will consider a proposal later this year to implement the requirement in Dodd-Frank
that the FDIC offset the effect of increasing the reserve ratio from 1.15 percent to 1.35
percent on institutions with assets of less than $10 billion.
Following seven quarters of decline, the DIF balance has increased for four consecutive
quarters. The DIF balance stood at negative $7.4 billion at year-end 2010, up from
negative $8.0 billion in the prior quarter and negative $20.9 billion at the end of 2009.
"These projections and trends are indeed good news, but I want to caution that we are
not out of the woods yet," said Chairman Sheila C. Bair. "While it is difficult to make
long-term projections, we think that these latest projections are a sign of continued
recovery in the banking industry."
The FDIC Board of Directors also voted to issue proposed guidelines governing
assessment rate adjustments under the new large bank pricing system that went into
effect beginning the second quarter of 2011. The new system is designed to better
Federal Deposit Insurance Corporation Each Depositor insured to at least $250,000
FOR IMMEDIATE RELEASE
April 12, 2011
Media Contact:
Andrew Gray (202) 898 -7192
angray@fdic.gov
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-66-2011
FDIC Announces Updated Deposit Insurance Fund Loss and Reserve Ratio
Projections
Projects Positive Fund by This Year
The Federal Deposit Insurance Corporation (FDIC) today updated its loss, income, and
reserve ratio projections for the Deposit Insurance Fund (DIF) over the next several
years. The projected cost of FDIC-insured institution failures for the five-year period
from 2011 through 2015 is $21 billion, compared to estimated losses of $24 billion for
banks that failed in 2010 alone. While these loss projections are subject to considerable
uncertainty, under these projections and current assessment rates, the fund should
become positive this year and reach 1.15 percent of estimated insured deposits in 2018.
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that the
fund reserve ratio reach 1.35 percent by September 30, 2020. The FDIC anticipates that
it will consider a proposal later this year to implement the requirement in Dodd-Frank
that the FDIC offset the effect of increasing the reserve ratio from 1.15 percent to 1.35
percent on institutions with assets of less than $10 billion.
Following seven quarters of decline, the DIF balance has increased for four consecutive
quarters. The DIF balance stood at negative $7.4 billion at year-end 2010, up from
negative $8.0 billion in the prior quarter and negative $20.9 billion at the end of 2009.
"These projections and trends are indeed good news, but I want to caution that we are
not out of the woods yet," said Chairman Sheila C. Bair. "While it is difficult to make
long-term projections, we think that these latest projections are a sign of continued
recovery in the banking industry."
The FDIC Board of Directors also voted to issue proposed guidelines governing
assessment rate adjustments under the new large bank pricing system that went into
effect beginning the second quarter of 2011. The new system is designed to better
capture risk at the time the institution assumes the risk, to better differentiate risk among
large insured depository institutions during periods of good economic and banking
conditions based on how they would fare during periods of stress or economic
downturns, and to better take into account the losses that the FDIC may incur if a large
insured depository institution fails. The proposed guidelines describe how rate
adjustments could be made for a limited number of institutions with risk attributes not
adequately captured by the new system. The proposed guidelines will have a 45-day
comment period upon publication in the Federal Register.
Attachments:
Updated Fund Loss Projections - PDF (PDF Help)
Rate Adjustment for Guidelines for Large Banks - PDF (PDF Help)
large insured depository institutions during periods of good economic and banking
conditions based on how they would fare during periods of stress or economic
downturns, and to better take into account the losses that the FDIC may incur if a large
insured depository institution fails. The proposed guidelines describe how rate
adjustments could be made for a limited number of institutions with risk attributes not
adequately captured by the new system. The proposed guidelines will have a 45-day
comment period upon publication in the Federal Register.
Attachments:
Updated Fund Loss Projections - PDF (PDF Help)
Rate Adjustment for Guidelines for Large Banks - PDF (PDF Help)