The nation’s largest banks could face billions in “special assessments” to recover the costs of bailing out uninsured depositors at Silicon Valley Bank and Signature Bank, the Federal Deposit Insurance Corporation (FDIC) proposed.
In order to bail out SVB and Signature in March, the FDIC invoked the “systemic risk exception,” allowing it to cover all bank deposits, including uninsured accounts that exceeded the $250,000 limit. However, under the law, the FDIC is required to recover the costs of the bailouts by slapping a special assessment on banks.
Since the start of the banking crisis in March, there have been widespread concerns on both sides of the aisle that small financial institutions would be required to cover the costs associated with depleting the Deposit Insurance Fund (DIF). As a result, FDIC officials estimate it will cost $15.8 billion to shield all depositors at the two failed banks, down from the previous projection of $22.5 billion….