FDIC hikes 2010 budget to $4 billion
16 Dec 2009
The Federal Deposit Insurance Corp (FDIC) yesterday hiked its 2010 budget to $4 billion from $2.6 billion this year. Additionally it announced plans to hire more than 1,600, mostly temporary employees, as it continues to grapple with a rising number of bank failures.
The FDIC board approved the 2010 budget, which earmarks $2.5 billion for resolving failed banks taken over by the agency, nearly double the $1.3 billion for 2009. Under the hiring plans, the number of FDIC employees will rise to 8,653.
This year has so far seen, 133 US banks collapse in the troubled economy that have left a trail of loan defaults, the highest since 1992 when the savings-and-loan crisis hit the banking industry. The corresponding figures for the immediate preceding years were 25 and three.
With the failures the federal deposit insurance fund has taken a hit of more than $30 billion so far this year.
According to FDIC chairman, Sheila Bair, though most banks continue to be profitable others continue to be stressed. She added that there may be a larger number of failures next year, with the cost of bank failures growing an estimated $100 billion over the next four years.
Bair in a statement said that the budget approved for 2010 "will ensure that we are prepared to handle an even larger number of bank failures next year, if that becomes necessary, and to provide regulatory oversight for an even larger number of troubled institutions."