Banks will prepay $45B in FDIC premiums to raise cash

[Slimprofits]

http://www.usatoday.com/money/indust...premiums_N.htm

WASHINGTON (Reuters) — Banks will prepay three years of deposit insurance premiums...under a rule adopted by the Federal Deposit Insurance Corp. Thursday.

...While banks would pay about $45 billion in cash upfront, they would not have to book the expense until the assessments were normally due over the three years.

The FDIC would not be able to use the money to bring up the balance of the insurance fund that safeguards bank deposits, but it would have operating liquidity.

[..]

Under the rule adopted Thursday, banks on Dec. 30 would prepay their estimated quarterly fees for the fourth quarter of this year and for all 2010, 2011 and 2012.

The FDIC will consider exemptions for some banks if the prepayment would harm the safety and soundness of those institutions, but the agency said it does not expect to grant many exemptions.

[Jay]

Re: Banks will prepay $45B in FDIC premiums to raise cash

Just another laundering technique.

[c1ue]

Re: Banks will prepay $45B in FDIC premiums to raise cash

Yes - what's the point of forcing banks to pay $45B up front but allowing them not to book it until the yearly assessment comes up?

This is a complete BS accounting gimmick.

Sheila Bair has confirmed her role in the Geithner/Summers/Obama/Bernanke cartel.

[LargoWinch]

Re: Banks will prepay $45B in FDIC premiums to raise cash

It is official; the FDIC is now in the red:

By Jessica Holzer
Of DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--The government insurance fund that protects more than $4.5 trillion of U.S. bank deposits slipped into the red at the end of September, after fifty banks collapsed during the third quarter.

The deposit insurance fund dropped by $18.6 billion during the third quarter of 2009 to negative $8.2 billion, as the Federal Deposit Insurance Corp. set aside $21.7 billion in provisions for additional bank failures. This is the second time in the agency's history that the balance has fallen into negative territory.

The FDIC has already called on the industry to prepay $45 billion in assessments at the end of the year that will be set aside to cover the cost of bank failures in 2010.

...

Article Here.