The FDIC in October projected that the Deposit Insurance Fund (DIF) would incur $19 billion in losses for failures of insured institutions in the five-year period from 2011 through 2015—less than the estimated $23 billion in losses caused by bank failures in 2010 alone. While the regulator cautioned that these loss projections are subject to considerable uncertainty, under these projections and current assessment rates, the DIF balance should equal 1.15% of estimated insured deposits in 2018.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires the fund reserve ratio to reach 1.35% by Sept. 30, 2020. The FDIC said a future rulemaking will implement the requirement in Dodd-Frank that the FDIC offset the effect of increasing the reserve ratio from 1.15% to 1.35% on institutions with assets of less than $10 billion.

The DIF turned positive in the second quarter of 2011, with a balance of $3.9 billion on June 30—ending a string of seven quarters in the red. The DIF balance has increased six quarters in a row, following seven quarters of decline. The DIF balance hit a low point of negative $20.9 billion at the end of 2009.

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