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FDIC may tap U.S. banks for funds: report
September 22, 2009 / 4:23 AM / in 8 years

FDIC may tap U.S. banks for funds: report

(Reuters) - The Federal Deposit Insurance Corp may ask healthy U.S. banks to lend billions of dollars to restore the health of the depleted fund that safeguards bank deposits, the New York Times reported, citing senior regulators.

<p>Chairman of the Federal Deposit Insurance Corporation (FDIC) Sheila Bair briefs the media on the bank and thrift industry earnings for the second quarter of 2009 while in Washington, August 27, 2009. REUTERS/Larry Downing</p>

The paper said the initiative, which has gathered strong support across the board, is seen as a more attractive alternative to tapping the $500 billion line of credit with the U.S. Treasury, or yet another emergency assessment.

According to the paper, the FDIC was reluctant to approach the Treasury department for additional funds, since any new borrowing could be seen as a bailout, and have a strong political reaction.

The FDIC, whose board members were yet to reach a consensus on the issue, is expected to issue a proposed plan next week, to replenish the dwindling fund, the paper said.

The FDIC could not be immediately reached for comment.

Reporting by Biswarup Gooptu in Bangalore; Editing by Jeremy Laurence

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