The Federal Deposit Insurance Corp. has called on banks with more than $5 billion in assets to help pay depositors of the defunct Silicon Valley Bankand Signature Bank. It is calling on those banks to pay for 95% of the $15.8 billion needed to protect the depositors who were above the $250,000 insurance level, according to a reportby Yahoo! Finance.

The FDIC replenishes its insurance fund with quarterly fees from all FDIC-insured banks. Since it is using a special assessment to cover the uninsured deposits for SVB and Signature Bank, it can adjust which banks will pay. Under its proposal, 113 banks would pay for the assessment and 4,500 wouldn't pay anything.

Smaller financial institutions lobbied the FDIC asking to be kept out of this arrangement as they do not engage in risky practices like SVB did, according to the report.

The FDIC will calculate the charge by using a formula tied to the amount of uninsured deposits that bank held as of Dec. 31. It will extend payment terms over eight quarters to minimize the impact on these large banks.

Once adopted, this policy will go under a comment period for 60 days. The FDIC aims for this policy to go into effect in the first quarter of 2024, with payments starting at the end of the second quarter.

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