Rebuilding FDIC to Take Years Posted by AVCU on 12:10 PM

The insolvency of the FDIC’s Deposit Insurance Fund (DIF) will likely span years--until 2012, according FDIC Chair Sheila Bair. The fund was significantly depleted this year as a result of 95 bank failures. But a DIF negative balance doesn't mean the agency will "run out of money," Bair told reporters earlier this week. The FDIC is planning to raise $45 billion by requiring banks to pre-pay their premium assessments until 2012. Under that plan, the DIF will reach its minimum balance in 2017. The DIF has always been expected to have at least $1.15 (1.15%) reserved for each $100 of insured deposits, but the ratio has been pushed much lower. On June 30 the reserve ratio was 0.22%.