WASHINGTON -- The Federal Deposit Insurance Corp. this week projected that bank failures will cost the agency $21 billion from 2011 through 2015, significantly less than the $24 billion in losses it estimates for banks that failed in 2010 alone.
In addition, the FDIC's staff projects that the Deposit Insurance Fund the agency operates will turn to a positive balance this year, after several negative quarters driven by a wave of bank failures in the wake of the financial crisis that shook the economy to the brink in 2008.
Banks pay fees to the agency for the insurance fund, which is used to make payments to depositors of failed banks, during good times as well as bad.
It has a negative balance of $7.4 billion at the end of 2010, up from negative $8 billion in the prior quarter and negative $20.9 billion at the end of 2009.
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