The FDIC might make big banks fill the $23 billion hole left by its rescue of SVB and Signature Bank
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- The FDIC is looking at $23 billion in costs from the SVB and Signature Bank failures.
- Bloomberg reported the agency may push big banks to shoulder a larger-than-usual share of those costs.
- There's political pressure to prevent putting a financial strain on community lenders.
The Federal Deposit Insurance Corp. is looking at roughly $23 billion in costs from bank failures this month, and it may push big banks to shoulder a larger-than-usual share of those costs, sources told Bloomberg.
The agency has said it plans to propose a special assessment on the industry in May to make its $128 billion deposit insurance fund whole after it was hit by the collapses of Silicon Valley Bank and Signature Bank, the report published Wednesday said.
Officials are looking to limit the burden on community lenders by putting a greater share of the expense on larger institutions, according to Bloomberg. Discussions over the size and timing of the assessment are in early stages.
The FDIC is under political pressure to spare small banks from filling the hole in the agency's coffers. The report said the regulator has noted it has latitude in how it sets those fees. A special assessment may be applicable to bank behemoths such as JPMorgan Chase, Bank of America, and Wells Fargo.
The cost of the bank failures has piled up because the FDIC, the US Treasury, and the Federal Reserve said all depositors at SVB and Signature Bank would fully protected. The FDIC usually guarantees coverage for up to $250,000 per account.
A spokesperson for the FDIC on Thursday declined to comment on the Bloomberg report and instead pointed Insider to remarks made Wednesday by FDIC Acting Chair Martin Gruenberg to the House Committee on Financial Services.
"Under the FDI Act, the loss to the [Deposit Insurance Fund] arising from the use of a systemic risk exception must be recovered from one or more special assessments on insured depository institutions, depository institution holding companies, or both, as the FDIC determines to be appropriate," he said.