A “targeted” deposit insurance system in which additional coverage would be extended to business payment accounts would be the best option for balancing financial stability and depositor protection relative to its costs, the FDIC said in its long-awaited review of the system.
The Deposit Insurance Fund could be replenished as early as 2024 under a restoration plan adopted by the FDIC last year, although a special assessment is required to recover losses resulting from the recent bank closures, according to an agency report.
More robust mobile banking options correlate with a greater likelihood of losing deposits to better-yielding accounts or investments as interest rates rise, according to a soon-to-be-published study by researchers at Columbia Business School and the University of Chicago.
The FDIC estimates that the cost of resolving Silicon Valley Bank will likely be $20 billion, which will be recovered by a special assessment on banks, FDIC Chairman Martin Gruenberg said this week.
The Federal Reserve will seek public comment on a proposal to publish a periodic list of depository institutions that have access to Fed accounts—often referred to as “master accounts”—and payment services, the agency announced today.
The FDIC board today unanimously voted to raise deposit insurance assessment rates for every bank by two basis points beginning with the first quarterly assessment period of 2023.
Banks have managed weather-related events and risks well, but things are changing and regulators and banks of all sizes will need to adapt.
Raising deposit insurance assessment rates during a time of economic stress leads to a “significant drop” in bank lending growth, which disproportionately affects smaller community banks, according to a working paper published today by the FDIC’s Center for Financial Research.
The American Bankers Association and five trade associations came out against a proposed two basis-point increase in deposit insurance assessment rates in comments submitted to the FDIC today, saying “such an aggressive assessment rate increase is unwarranted.”
In response to the Financial Accounting Standards Board’s recent elimination of accounting guidance for troubled debt restructurings for adopters of the current expected credit loss standard, the FDIC is proposing to update the scorecard it uses to calculate assessments for large and highly complex insured depository institutions to reflect the changes.