WASHINGTON -- The Federal Deposit Insurance Corp. made it official Tuesday: The Bank Insurance Fund ended 1991 $7 billion in the red.

That means the FDIC's coverage ratio - how much money it holds to cover the deposits it insures - now is a negative 36 cents for every $100 insured.

Just two years earlier, the agency had 70 cents for every $100 it insured. By law, the FDIC must rebuild the fund to a $1.25 coverage ratio by 2006.

The agency's 1991 financial statements were in line with its previous estimates. The figures have yet to be endorsed by the General Accounting Office, which is expected to do so this month.

127 Banks Closed in 1991

The FDIC spent $11.1 billion last year to close 127 banks with $63 billion in assets.

Fewer banks failed in 1991 than 1990, but the insolvent institutions were on average five times larger than those failing the previous year. The average failed bank in 1991 had $509 million in assets.

The agency is well reserved to pay for future bank failures, with $16.3 billion set aside. In past years, the FDIC reserved just for failures it expected to occur within a year. In 1991, however, the FDIC started reserving for all losses foreseen at yearend, regardless of when the banks may actually fail.

'More Aggressive' Reserves

"The theory under which the reserving is done is a little more aggressive," FDIC Chairman William Taylor said in an interview Monday. "It's not a time concept; it's a risk concept."

The BIF collected $5.8 billion in 1991, up nearly 49% from $3.9 billion in 1990. A premium increase planned for Jan. 1 is intended to bring in $7.2 billion next year.

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