Reserve Ratio

     WASHINGTON (CN) – Since twenty-five federally insured banks failed last year and the Federal Deposit Insurance Corporation projects that the rate of failures will climb, it plans to increase the Federal Insurance Fund by charging a fee of .7% of the holdings of all member institutions.

     A low ratio of insurance fund reserve to insured bank holdings depletes confidence in the stability of the banking system, and the intent of the FDIC’s proposed rule would be to raise the amount the fund to 1.5% of all holdings by 2015.
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