WASHINGTON, Feb. 26 (UPI) -- The federal insurance fund that guarantees the security of U.S. bank deposits is being drained by the rise in financial institution failures, officials said.
The Federal Deposit Insurance Corp. fund has dropped to its lowest level since 1993, The Washington Post reported Thursday.
Depositors are not at risk because the fund is backed by the government, but taxpayers could be forced to buttress the fund if its reserves slip further, the newspaper said.
There was $52.4 billion in the fund at the beginning of 2008 but one year and 25 bank failures later, the fund held $18.9 billion, the report said. So far this year, another 14 banks have failed, draining another $1.7 billion from the insurance fund.
FDIC Chairman Sheila Bair said Thursday the industry must carry the cost.
"It's painful to get your premiums raised, but I think deposit insurance is a really good bargain right now," Bair said. "It's a value, and unfortunately we're going to have to charge more for it."