The Federal Deposit Insurance Corporation said on Thursday that of the total cost of the failures of Silicon Valley Bank and Signature Bank, approximately $15.8 billion was attributable to the protection of uninsured depositors. FDIC stated that banking organizations with total assets over $50 billion would pay over 95% of the “special assessment.”
The figure includes giants like JPMorgan Chase & Co JPM and Bank of America Corp BAC as well as regional lenders that have been at the center of the recent banking turmoil, according to a Financial Times report.
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However, lenders with total assets under $5 billion would not be subjected to the special assessment.
“In general, large banks with large amounts of uninsured deposits benefitted the most from the systemic risk determination. As proposed, it is estimated that a total of 113 banking organizations would be subject to the special assessment,” it said.
Rate: The FDIC said it is proposing to collect the special assessment at an annual rate of approximately 12.5 basis points over eight quarterly assessment periods.
“The proposal applies the special assessment to the types of banking organizations that benefitted most from the protection of uninsured depositors, while ensuring equitable, transparent, and consistent treatment based on amounts of uninsured deposits,” said FDIC Chairman Martin J. Gruenberg.
The total cost of rescuing SVB and Signature depositors now stands at $18.5 billion compared to over $20 billion, mainly because the FDIC now expects to recover more from selling off the SVB assets than previously anticipated, said the Financial Times report.
FDIC estimated an average one-quarter reduction in income of 17.5% for the lenders assuming that the effects on capital and income of the entire amount of the special assessment would occur in a single quarter.