Financial Regulatory Forum

FDIC to consider ways to replenish deposit fund

By Reuters Staff
September 18, 2009

WASHINGTON, Sept 18 (Reuters) – U.S. bank regulators will meet at the end of the month to explore options, possibly including some that are not well-known, to replenish the dwindling fund that safeguards bank deposits, the chairman of the Federal Deposit Insurance Corp said on Friday.

Sheila Bair said the agency would probably put out for public comment the options to regenerate the insurance fund — which has been significantly drained by a sharp increase in bank failures — including tapping the FDIC’s line of credit with Treasury.

“We are carefully considering all our options, including borrowing from Treasury,” Bair said at a global finance summit in Washington.

She said the FDIC also had lesser-known alternatives for replenishing the fund, such as prepayments of assessments on banks and issuing a note. She did not further detail those options.

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