The FDIC has finalized a series of proposals to overhaul how premiums are set for the Deposit Insurance Fund (DIF) to meet new goals to ensure the DIF is sufficient in the face of any future crises. The new system – which would come into play very quickly – changes the DIF assessment base from domestic deposits to assets, as required by the Tester Amendment to the Dodd-Frank Act. This will shift the burden of assessments more to large banks, as Congress and the FDIC intend, although the FDIC believes the new system will remain in aggregate revenue-neutral in terms of total SIF assessments to meet the new goals. Large banks will also be governed by a new risk-based schedule designed to align DIF premiums better with the risk a big bank poses both in terms of probability of failure and loss to the DIF should it do so. The FDIC believes that about half of all large banks will see premiums rise and half will see them fall under the new scheme, but the impact is likely largely to be costly – often very costly – for the largest U.S. insured depositories.
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