FDIC says bank failures to cost around $100B

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Federal regulators expect bank failures to cost the deposit insurance fund about $100 billion in the next four years and the fund to fall to a negative balance this month.

That is higher than an earlier estimate of $70 billion in failure costs through 2013.

The Federal Deposit Insurance Corp. made the projections Tuesday as its board proposed requiring banks to pay in advance an estimated $45 billion in regular insurance premiums for 2010-2012.

“I do think this is a good balance,” FDIC Chairman Sheila Bair told reporters.

The plan requires the banking industry “to step up” while spreading the financial hit to banks over a number of years, she said.

Copyright 2009 The Associated Press.