Congress last week temporarily increased the coverage for individual accounts to $250,000 from $100,000, although the FDIC said that didn't figure into its plans to increase the premiums that underwrite the insurance.
The FDIC estimates the Deposit Insurance Fund will take a $13-billion hit this year from the failure of IndyMac Bank and a dozen other institutions, and projects $27 billion in additional bank-failure costs by the end of 2013.
Bankers said they could afford the increase -- an average institution would see its premiums rise from 6.3 cents per $100 of deposits to 13.5 cents -- and noted the importance of the fund in maintaining customer confidence.
But the American Bankers Assn. said the higher premiums would mean banks would have less money to lend. And consumers are likely to see increased fees or lower interest rates for their deposits to make up for the additional premiums.
For his part, President Bush tried to sound a reassuring note while acknowledging the crisis.
"Right now we're in tough, tough times, no question about it," Bush said as he paid a visit to Guernsey Office Products in Chantilly, Va., a Washington suburb. "But you can't convince me that in the long run we're not going to get back on our feet again. And if anybody ever says that, they don't understand the American spirit."
"No question, in the short term . . . the value of your 401(k), if you're in stocks, is going to go down," Bush said. "I wish I could snap my fingers and make what happened stop. But that's not the way it works."
"Let's give this time," he added. "Let's give this plan time to get these credit markets eased up so that normal business can begin."
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maura.reynolds@latimes.com
walter.hamilton@latimes.com
Reynolds reported from Washington and Hamilton from New York. Times staff writers Jim Puzzanghera and James Gerstenzang contributed to this report.
