WASHINGTON The Federal Deposit Insurance Corp. on Tuesday approved a nearly 11% reduction in the agency's budget for 2014, a further sign of how the improving economy is reducing bank failures.
The $2.4 billion spending proposal is 10.9% lower than the 2013 proposed budget. Funding for FDIC receiverships is down by a third to $600 million, while proposed staffing decreased 10.6% to just below 7,200 positions.
"The proposed corporate operating budget for 2014 reflects a continuation of the trend we've experienced for the last three years of gradual reductions in our budget and staffing requirements and that is consistent with our steadily declining workload," Thomas Peddicord, a deputy director in the FDIC's finance division, said at Tuesday's board meeting.
Total proposed staffing in the division of resolutions and receiverships, which had driven the agency's expansion during the crisis in response to the wave of bank failures, is 916 positions. That is a drop of 547 compared to 2013, and a sharp decline from the 2,460 such positions in 2010 when staffing peaked.
Proposed staffing for FDIC supervision has also declined, although not as sharply. The budget includes 1,779 positions for risk management examinations, a 10% decrease from 2013 and 21% reduction from the peak in 2011.
As in other recent cycles, the decline in staffing is due largely to the removal of non-permanent positions that the FDIC had added to handle expanded duties during the crisis. While non-permanent staff will decline by 894 positions, compared to 2013, permanent positions actually increase in the 2014 budget by 40 positions. The increase is due in part to monitoring of large institutions.