The latest analysis by the Congressional Budget Office predicts bank failures will cost the Federal Deposit Insurance Fund $100 billion over the next five years, a level that ensures banks will pay high deposit insurance assessments for the next decade, says Concept Capital analyst Jaret Seiberg. The assessments are levied by the Federal Deposit Insurance Corp.
Seiberg predicted there would be political ramifications from that and other CBO cost estimates related to the bailout of the financial system. CBO also estimated that the Treasury Department's Trouble Asset Relief Program would cost $152 billion in 2009 and $15 billion in 2010, higher than expected. Seiberg said the higher estimate makes it harder to convince Congress to approve additional relief funds.
"Of course, that assumes that Congress would have been willing previously to approve more funds," Seiberg wrote in an alert to clients. "We were skeptical of that. Now we are more skeptical." - Bill McConnell
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