FDIC

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On May 22, the FDIC boared of directors adopted a final rule relatex to the special assessments it plansa to chargethe nation’s banks. After considering a one-time assessment of 20 centd per $100 of deposits, the FDIC backed off and settlexd on a charge of 5 cents foreach $100 of total assets as of June 30, minus bank equity known as Tier 1 It will collect the payment on 30. Peter deSilva, president of Kansas City-based , said the FDIC was able to reducde the special assessment mainly because the federal government approvexda $100 billion credit line with the .
“The bottom line here is we have to replace the FDIC which sits atabout $14 billion securing an industry with $7 trillion in deposits,” deSilva “By the FDIC’s own there are about 250 bankas with about $150 billion in assets on the problem bank So there aren’t a lot of insurances funds securing the deposits. However, with a $100 billion creditt line at the Treasury, they should be OK.
” The FDIC warnedr banks that another special assessment is likely in the fourth once again 5 basis points on assets minus Tier 1 By considering Tier1 capital, the assessment formulq rewards stronger banks, something deSilva sees as a win for his “We’ve been asking for more tiering in the assessment process to recognize the greater risk involved with some of thesr banks who have taken a lot of he said. “While there is test here makin g weaker bankspay more, we’d like to see that increasedd even further, so there is some recognition for the banks that did thingd right.
” The FDIC said in a letterr to financial institutions that bank examiners will not downgrade an institution’sd ratings strictly because of the negative effect of the speciao assessment. Banks still will be expectesd to comply with minimum regulatory capital but regulators will factorr in the nonrecurring nature of the special assessments when makinyg their overall analysis of capital adequacyuat banks.