May 11, 2009 / 1:44 PM / 10 years ago

Obama proposes expanding FDIC's borrowing power

U.S. President Barack Obama talks about job creation and job training at the Eisenhower Executive Office Building in Washington, May 8, 2009. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - U.S. President Barack Obama on Monday proposed increasing the borrowing authority of the Federal Deposit Insurance Corp with the Treasury Department to $100 billion from the current $30 billion.

With an expected increase in bank failures, the authority would give the FDIC the ability to finance expenses for resolving failed FDIC-insured institutions, including guaranteeing up to $250,000 per depositor.

The increase also would give the agency the flexibility to lower premiums charged to banks for FDIC insurance coverage at a time when struggling banks can least afford to pay it.

In the meantime the U.S. Congress is considering legislation aimed giving the FDIC a similar increase but lawmakers also want to give the agency temporary borrowing ability for up to $500 billion in the event of an emergency.

Reporting by John Poirier and Kim Dixon; Editing by Neil Stempleman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below