Failed US banks wipe 17% from federal insurance fund
The failure of eight US banks this year is expected to wipe 17% off the US Government’s deposit holder insurance fund.
Reports say the closing of housing lender IndyMac in July may cost the Federal Deposit Insurance Corporation (FDIC) a further $US4-8 billion ($4.6-9.3 billion) in addition to an estimated $US1.16 billion ($1.34 billion) from seven prior failures.
The insurance fund held a total of $US52.8 billion ($61.2 billion) at March 31.
The FDIC is required to add to the fund when the reserve ratio dips to 1.15% – a threshold the IndyMac closure is expected to breach.
The fund protects the first $US100,000 ($116,000) of depositors’ funds and up to $250,000 ($290,000) on some retirement accounts across more than 8400 institutions.
Reports say the closing of housing lender IndyMac in July may cost the Federal Deposit Insurance Corporation (FDIC) a further $US4-8 billion ($4.6-9.3 billion) in addition to an estimated $US1.16 billion ($1.34 billion) from seven prior failures.
The insurance fund held a total of $US52.8 billion ($61.2 billion) at March 31.
The FDIC is required to add to the fund when the reserve ratio dips to 1.15% – a threshold the IndyMac closure is expected to breach.
The fund protects the first $US100,000 ($116,000) of depositors’ funds and up to $250,000 ($290,000) on some retirement accounts across more than 8400 institutions.