News
7x24
Quotes
Economics Calendar
Video
Data
- Names
- Latest
- Prev.
Columns
Trending Topics
Russia-Ukraine Conflict
The war between Russia and Ukraine continues, and it is difficult for the two sides to reach an agreement in negotiations. Western countries have imposed several rounds of sanctions on Russia. The outlook is unpredictable.
The Fed
The Federal Reserve (Fed), or the central bank of the United States, is responsible for regulating the U.S. monetary policy and interest rates. As a provider of liquidity for world trade, the Fed is also known as the world's central bank. Its every move affects the global economy and financial markets.
China-U.S. Relations
Focus on Pelosi's Taiwan Visit ! How will China-U.S. relations develop in the future, win-win cooperation or confrontation?
FastBull Spotlights
Pick the most insightful news around the world for you!
Video
Latest Update
Full Course: How to Optimize Your Strategy With Ai that Boost Your Trading Performance?
How did I optimize the supertrend strategy from TradingView and made 20x gain using Machine Learning Decision Tree?
Full Course: Beginner’s Guide to Develop a Robust Deep-Learning Ai for Stock or Crypto Trading
This is the Guide on how to Develop a Robust Deep-Learning Ai for cryptocurrency investing for beginners, explaining the use of recurrent neural networks (RNN) for price changes and a linear layer for technical indicators, and presents a code snippet for building the AI model using PyTorch.
How to customize your own indicators and get over 2x of your asset returns?
An example of a customized indicator strategy that significantly increased BTC returns during a long bullish trend is presented, want to know the backtest results and codes of the strategy?
PEPE Has Surged Over 7000% Max In 1-Month! Buy It or Sell It?
PEPEcoin gained over 7000% in 1-month and surged to over 1.6 billion dollar market cap. Is there still a chance to buy from the technical indicators?
Recent Searches
Trending Searches
View All
No data
Invite
What is the FDIC's Deposit Insurance Fund Used to Backstop Failed Banks?
Summary:
The Federal Deposit Insurance Corp (FDIC) and its flagship deposit insurance fund have been active since the Great Depression to provide an orderly resolution for failed banks and to reimburse certain customer accounts.
The Federal Deposit Insurance Corp (FDIC) and its flagship deposit insurance fund have been active since the Great Depression to provide an orderly resolution for failed banks and to reimburse certain customer accounts.
The FDIC said on Monday it would backstop a deal for regional lender First Citizens BancShares to acquire failed Silicon Valley Bank, triggering an estimated $20 billion hit to a the deposit insurance fund.
Here's what you need to know about the fund and how it works:
What is the deposit insurance fund?
The FDIC's deposit insurance fund helps to fulfill the agency's guarantee of bank deposits up to $250,000. In the event an insured bank fails, the FDIC uses the deposit insurance fund to pay back customers who maintained accounts under the limit.
In the case of Silicon Valley Bank and Signature Bank - which also failed shortly after the collapse of the former - the U.S. government determined that a "systemic risk exception" applied and reimbursed all customers-- including those whose deposits exceeded the $250,000 limit-- in an attempt to prevent further contagion to the banking system.
Throughout the FDIC's history, the insured deposit amount has been raised multiple times, most recently in the wake of the 2008 financial crisis when lawmakers passed legislation raising the cap from $100,000 to $250,000.
How is it funded?
The deposit insurance fund is funded through fees the FDIC charges insured banks, as well as the interest the FDIC earns on its investment of those funds in U.S. government obligations, like Treasury bills.
The fee a bank pays to the FDIC on a quarterly basis varies depending on a bank's liabilities and its risk profile. As of the end of last year, the deposit insurance fund balance stood at $128.2 billion.
In October, the FDIC finalized a rule to increase initial base deposit insurance assessment rate schedules by 2% starting in June.
The FDIC by law is required to resolve failed banks using the least costly option to minimize losses to its deposit insurance fund.
What happens when there are losses to the fund?
In the cases of Silicon Valley Bank and Signature Bank, any losses to the deposit insurance fund will be covered through a "special assessment" fee on banks, according to the FDIC.
The FDIC said on Sunday that it estimates the failure of Silicon Valley Bank will cost the deposit insurance fund $20 billion, but that the exact cost will be determined at a later date.
What is loss sharing?
The FDIC has the option to enter into a loss-sharing agreement with a firm that purchases a failed bank's assets. Under such an agreement, the FDIC absorbs a portion of the loss on a certain pool of assets, effectively sharing the loss along with the purchaser of a failed bank. The agency occasionally uses this tool to facilitate the sale of a failed bank by helping the acquirer avoid heavier losses.
The FDIC and First Citizens entered into a loss-sharing agreement on the commercial loans First Citizens purchased from Silicon Valley Bank.
If First Citizens makes any recoveries on those commercial loans, the FDIC will receive a portion of those recoveries.
What else will the FDIC get out of the first citizens deal?
In its announcement on Sunday that First Citizens would purchase Silicon Valley Bank's deposits and loans, the FDIC announced that as part of the deal, it would be receiving equity appreciation rights in First Citizens worth up to $500 million.
Beyond that, the FDIC will receive 3.5% annual interest on a 5-year $35 billion note that First Citizens issued to the FDIC as financing to buy the assets from the FDIC.
Source: Reuters
Risk Warnings and Investment Disclaimers
You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.
Quick Access to 7x24
Quick Access to More Editor-selected Real-time News
Exclusive video for free
FastBull project team is dedicated to create exclusive videos
Real-time Quotes
View more faster market quotes
More comprehensive macro data and economic indicators
Members have access to entire historical data, guests can only view the last 4 years
Member-only Database
Comprehensive forex, commodity, and equity market data
- Economics Calendar
- Events
- Holiday
BANKS ACT (%) PREV (%) CPI (%)
SYMBOL
LONG SHORT
English
English
العربية
繁體中文
简体中文
Bahasa Melayu
Bahasa Indonesia
ภาษาไทย
Tiếng Việt
Copyright © 2023 FastBull Ltd
Home News Columns 7x24 Economics Calendar Quotes Video Data WarehouseAnalysis AI Signal Pro User Agreement Privacy Policy About Us
Risk Disclosure
The risk of loss in trading financial assets such as stocks, FX, commodities, futures, bonds, ETFs or crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.
No consideration to invest should be made without thoroughly conduct your own due diligence, or consult with your financial advisors. Our web content might not suit you, since we have not known your financial condition and investment needs. It is possible that our financial information might have latency or contains inaccuracy, so you should be fully responsible for any of your transactions and investment decisions. The company will not be responsible for your capital lost.
Without getting the permission from the website, you are not allow to copy the website graphics, texts, or trade marks. Intellectual property rights in the content or data incorporated into this website belongs to its providers and exchange merchants.