= Members Only Content
FOR IMMEDIATE RELEASE
October 11, 2011
ABA Media Contact: Jeff Sigmund
(202) 663-5439
E-mail: jsigmund@aba.com
Follow us on Twitter: @ABABankingNews
ABA STATEMENT ON FDIC DIF RECAPITALIZATION PLAN
By James Chessen, ABA chief economist
"The FDIC's update on the recapitalization of the Deposit Insurance Fund reaffirms the fact that the banking industry is rapidly returning to health and the losses once expected were overstated. The FDIC had set aside $17.7 billion for possible bank failures losses at the start of 2011, twice what the actual losses are likely to be this year.
"The banking industry, not taxpayers, is solely responsible for the financial health of the FDIC. Banks are paying $13.5 billion in yearly premiums to the FDIC, which is far in excess of the yearly costs expected by the FDIC over the next several years. The insurance fund is rebuilding faster than the FDIC had projected at the end of 2009 when the industry paid $46 billion in pre-paid assessments to ensure the FDIC would have adequate cash to handle any contingency.
"The banking industry has a positive fiscal trajectory with asset quality improving, capital at record levels and profitability returning to most banks. As a sign of strength of both banks and the FDIC, deposits are rapidly flowing into banks. There is no safer place for money than in an FDIC-insured account at a bank."
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EDITOR's NOTE: See attached charts on bank failure costs; DIF coverage ratios; bank capital; and bank profitability.
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation's $13 trillion banking industry and its two million employees. Learn more at aba.com.
