In this report, FedFin assesses the FY13 budget treatment of the FDIC and its impact on premiums and fees, especially those for large banks now subject to costly asset-based charges (see FSM Report DEPOSITINSURANCE97). The budget differs markedly from FDIC projections, anticipating a negative DIF in sharp contrast to FDIC forecasts of continued progress to required designated reserve ratios (DRRs). While OMB does not anticipate any calls on Treasury, it does argue that the FDIC will need to impose still higher premiums on large banks to offset the costs of bank failures. The budget also estimates a $19 billion tab for FDIC operational and resolution costs under its orderly-liquidation authority (OLA). This is a higher total than the FDIC and most analysts project, likely raising the cost of pending large-bank assessments for the start-up cost (see FSM Report SYSTEMIC56).
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