New FDIC proposal would cut into bank earnings

|By:, SA News Editor

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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