WASHINGTON -- The banking industry has prepared a plan to contribute $10 billion over the next two years to avoid a taxpayer bailout of the troubled fund that insures savings deposits, industry officials said yesterday.
The plan, which will be presented to federal regulators Tuesday, calls for banks to purchase a special issue of bonds from the Federal Deposit Insurance Corp. The bonds would be sold periodically whenever the federal insurance fund is running dangerously low on money needed to shut down insolvent banks.
The bankers will present their plan to FDIC Director L. William Seidman without linking it specifically to hopes for a major expansion of bank powers -- unfettered movement across state lines and full entry into the sales of securities and insurance.
But they feel that a demonstration of the industry's ability to keep the insurance fund solvent without dipping into the Treasury would create a favorable climate in Congress for legislation granting expanded powers. Bankers hope it would show the public and federal government that the industry is healthy and efficient.
The deposit insurance fund, which guarantees deposits up to $100,000, will need $10 billion to $15 billion to handle anticipated failures this year and in 1992, Seidman has told Congress. The FDIC now has authority to borrow $5 billion from the Treasury.