The Federal Deposit Insurance Corp. is expected to finalize on Monday numerous deposit insurance measures and propose new rules to stop risky compensation plans.
The premium changes, proposed in November, include a new method for calculating deposit insurance assessments. Under the change, required by the Dodd-Frank Act, the FDIC will multiply a bank's risk-based insurance rate by its assets minus its capital — instead of by its deposits — to calculate an assessment. The reform is meant to capture the nondeposit liabilities, used mainly by large banks, in their premiums.
Another key premium-related rule involves how the FDIC comes up with risk-based rates for large banks. In the November proposal, the agency proposed tweaking its risk formula for large institutions to make their insurance price more risk sensitive.
The FDIC board is also expected to issue a proposal, in concert with several other agencies, requiring greater disclosure about a bank's compensation agreements with top executives. Under Dodd-Frank, the agencies must require reports from institutions detailing their compensation plans and prohibit pay packages found to be excessive.
