The Associated Press reports that big bankers probably will not be cashing their bonuses at this time. The FDIC is working toward instituting a rule that would demand at least half of bankers’ annual bonuses to be pushed forward by three years, a move to help protect the United States economic recovery. Banks that possess $ 50 billion or more in assets will fit in the FDIC ruling. Source for this article – Banker bonuses will have to wait three years, says FDIC by MoneyBlogNewz.
Insurance fees from big banks larger
In addition to the suggested banker bonuses provision, a clause within the Dodd-Frank Act will demand the very same large U.S. banking institutions to contribute more in insurance costs to the FDIC in order to protect financial institution deposits nationwide. Those banks that hold the most in assets – rather than deposits – minus concrete equity will contribute more to the deposit insurance fund. There can be a larger charge to the institutions that have a greater risk because of high assets and less liquidity.
During the bank closures and bailouts, the insurance fund has been in the red for some time as low as $15.2 billion. The deficit was cut to $8 billion, which is half, by the third quarter of 2010.
A smaller amount paid for by small banks though
According to small financial institution trade group the Independent Community Bankers of America, ninety eight % of banks that possess less than $10 billion in assets will pay less money into the insurance fund, due to a variety of rule changes. According to the ICBA, smaller banks in America will save money. In the next three years, $4.5 billion can be saved this way.
“ICBA led the charge throughout the Wall Street reform debate to create fairness within the deposit insurance system so that Main Street community banks can continue to serve their customers and keep money where it belongs – in the community,” said chairman James MacPhee.
Getting better than this
The FDIC fund will be able to become positive again, states Blair, with the greater deposit insurance contributions. Predictable rates for quick unsecured loans could be more like to take place for banks with this.
“The financial crisis provided ample evidence of the need to improve the assessment system," said Bair. "The banking industry, the Deposit Insurance Fund and the financial system will benefit from this rule in both the short and long term.”
Information from
USA Today
usatoday.com/money/companies/management/2011-02-07-fdic-exec-pay_N.htm?csp=34money&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+UsatodaycomMoney-TopStories+%28Money+-+Top+Stories%29
Housing Wire
housingwire.com/2011/02/07/fdic-to-base-insurance-charges-to-banks-based-on-risk-not-deposits
Imagine all the bankers living for less pay
youtube.com/watch?v=uesCu3VVR4E
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