The Bank Slate


FDIC to seek special assessment to address bank failures

The Federal Deposit Insurance Corp. plans to impose special assessments on the banking industry to replenish losses to the Deposit Insurance Fund (DIF) stemming from the failures of Silicon Valley Bank and Signature Bank.

FDIC Chairman Martin Gruenberg, in written testimony released prior to a Tuesday hearing of the Senate Banking Committee, said the agency plans to issue a notice of proposed rulemaking in May to address the special assessment.

The FDIC estimated that the failure of Silicon Valley Bank will cost the DIF $20 billion, while the collapse of Signature Bank is expected to cost the fund $2.5 billion.

“The loss to the DIF arising from the use of a systemic risk exception must be recovered from one or more special assessments on insured depository institutions, depository institution holding companies, or both, as the FDIC determines to be appropriate,” Gruenberg said, citing the Federal Deposit Insurance Act.

“The FDI Act provides the agency with discretion in the design and timeframe for any special assessment to cover the losses from the systemic risk exception,” he added.

Gruenberg said the FDIC’s chief risk officer will undertake a review of the agency’s supervision of Signature Bank, with plans to release a report by May 1. The Fed is expected to release a similar report for Silicon Valley Bank.

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