New FDIC proposal would cut into bank earnings


Open for comment for the next 60 days are revisions in the way the FDIC calculates deposit insurance premiums. The changes - necessary to match new capital rules - would eliminate a practice allowing up to six of the nation's big banks to claim a "significant reduction in assessments," according to FDIC officials.

At issue are internal models banks used to measure counterparty risk; the models, according to the proposal, created an imbalance in which assessments were skewed by bank calculations rather than actual risk.

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  • flemsnopes
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    This sounds ominous on at least two levels, (1) the FDIC appears to be actually declaring the obvious that the "to big to fail" banks are underinsured and (2) they (FDIC) are getting MORE nervous about their own inadequate reserves of LESS than 1.15% of covered deposits. It might be time to quietly move closer to the nearest exit.
    16 Jul 2014, 08:01 AM Reply Like
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