FDIC Insurance

The FDIC stands for the Federal Deposit Insurance Corporation. As of December 2007, it had $52.4 billion in reserves (the insurance fund) (audited) and as of March 2008, it had $52.8 billion. To read the FDIC financial reports, click on FDIC’s annual and financial reports.

Alison Vekshin in Bloomberg in August 2008 mentioned the following:

• The FDIC is required to increase its insurance fund when the reserve ratio, or the balance divided by the insured deposits, falls below 1.15 percent, or if the reserve ratio is expected to fall below that 1.15% within six months. “A 2006 law directs the agency to take steps to reach the 1.15 percent ratio within five years.”
• The FDIC adds money to its insurance fund through premiums charged to banks. In 2007, the premiums charged to banks averaged 5.4 cents per $100 of insured deposits. “Troubled banks pay higher rates.”
• “The FDIC insured $4.43 trillion in deposits as of March 31,” 2008.

To read the entire report, click on FDIC Fund Strained by Bank Failures May Lift Premiums (Update2).

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