Business

Banks to Prepay Premiums to FDIC
by Milota Sidorova

Someone might call that controlling banks, or maybe avoiding of potential risk or at least showing some effort to fulfill promise given to American government and tax-payers It would be the first time when banks will prepay decades of billion dollars in premiums to gather deposit insurance funds. The action is coming from Federal Deposit Insurance Corp. that should confirm this option at its public meeting today. FDIC asked banks to prepay insurance premiums for upcoming three years (2010-2012) , each year a $12 billion amount. Although it is relatively normal amount of insurance fee, it may be influenced by growth in total insured deposits. General economic markers may b! e getting rich, but the consequences of crisis will lay down on thousands of private companies, including banks. So far there have been more than 95 banks closing down this year and according some analysts hundred or more banks will end up in bankruptcy during next three years. FDIC will have to gather at least $70 billion to cover to looses. The preliminary action could help. There are more possibilities how could bank pay such fees. First of all may be internal loans – when health banks are borrowing money to those in desire. There is also a chance to get a loan from Treasury, however, FDIC Sheila Bair commented it as the last possibility. Getting a loan from Treasury would create an image of getting another taxpaid bailout. FDIC was putting alternative plans on the table, for example transfer of cash collected in fees from temporary rescue program. FDIC guaranteed hundreds of billions of dollars of debt holding between banks. This way the agency totalled $9 billio! n from banks under the program. More than $596 million has alr! eady mov ed into the deposit insurance fund. The official result should be known by Tuesday’s afternoon.

related story (sgx15495): http://news.yahoo.com/s/ap/20090928/ap_on_bi_ge/us_fdic_shri...

by Milota Sidorova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 1:27 PM