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The Federal Deposit Insurance Corporation, or FDIC, which is staring at about $23 billion in costs from recent bank collapses, is reportedly mulling to shift a larger-than-usual portion of the burden to the biggest banks in the U.S.
What Happened: Officials are considering to limit the strain on community lenders by moving an outsize portion of the expense toward big lenders, reported Bloomberg, citing people with knowledge of the matter.
Such a move is likely to add to what already may be multibillion-dollar tabs, apiece, for the likes of JPMorgan Chase & Co JPM, Bank of America Corp BAC and Wells Fargo & Co WFC, the report added.
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Special Assessment: FDIC has said it plans to propose a special assessment on the industry in May to raise a $128 billion deposit insurance fund that’s set to take hits following the recent collapses of Silicon Valley Bank and Signature Bank SBNY, the report stated.
FDIC, JP Morgan, Bank of America and Wells Fargo did not immediately respond to Benzinga‘s email requests for comments regarding the report.
It is noteworthy that when the FDIC’s main fund takes a blow, the agency can impose a special assessment to accelerate the process of refilling its coffers, according to the report. FDIC Chairman Martin Gruenberg said at a hearing on Wednesday, “We have the discretion to tailor that assessment to the institutions that most directly benefited.”
The FDIC has estimated the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion while it estimates the cost of the failure of Signature Bank to to be approximately $2.5 billion.
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Image and article originally from www.benzinga.com. Read the original article here.