Insurance Program

The FDIC maintains stability and public confidence in the U.S. financial system by providing deposit insurance. By promoting industry and consumer awareness of deposit insurance, the FDIC protects depositors at banks and savings associations of all sizes. When insured depository institutions fail, the FDIC ensures that the financial institution’s customers have timely access to their insured deposits and other services. To keep pace with the evolving banking industry and maintain its readiness to protect insured depositors, the FDIC prepares and maintains contingency plans to promptly respond to a variety of insured depository institution failures and conducts large-scale simulations to test its plans

Bank failures during 2008 significantly increased losses to the Deposit Insurance Fund (DIF), resulting in a decline in the reserve ratio. As of December 31, 2008, the reserve ratio stood at 0.40 percent (based on unaudited fund balance results), down from 1.22 percent at the beginning of the year. The Federal Deposit Insurance Reform Act of 2005 (the Reform Act) requires that the FDIC Board of Directors adopt a restoration plan when the DIF reserve ratio falls below 1.15 percent or is expected to do so within six months. On October 7, 2008, the FDIC Board adopted a restoration plan that was projected to raise the reserve ratio to at least 1.15 percent within five years. On December 16, 2008, the Board adopted a final rule raising assessment rates by five basis points in the first quarter of 2009. On February 27, 2009, the Board amended the restoration plan to extend its horizon from five years to seven years due to extraordinary circumstances. It also adopted a final rule setting rates beginning in the second quarter of 2009 and making other changes to the risk-based pricing system. It also adopted an interim rule imposing a special assessment on all insured institutions on June 30, 2009 (to be collected on September 30). The interim rule would also permit the FDIC Board to impose a special assessment of up to ten basis points at the end of any calendar quarter (after June 30, 2009) when the FDIC estimates that the reserve ratio will fall to a level that would adversely affect public confidence or to a level close to or below zero.

On October 3, 2008, the Emergency Economic Stabilization Act of 2008 was signed into law. It temporarily raised the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor. The temporary increase in deposit insurance coverage became effective immediately upon the President's signature. The legislation provides that the basic deposit insurance limit will return to $100,000 after December 31, 2009.

The FDIC established the Temporary Liquidity Guarantee Program (TLGP) on October 13, 2008, in response to credit market disruptions, particularly in the interbank lending market, which reduced banks’ liquidity and impaired their ability to lend. A final rule on the TLGP was adopted on November 21, 2008. The TLGP has two components, the debt guarantee program and the transaction account guarantee program. Eligible entities were able to opt out of one or both components on or before December 5, 2008. As of February 18, 2009, approximately 87 percent of eligible entities had elected to participate in the transaction account guarantee program, while approximately 56 percent of eligible entities had elected to participate in the debt guarantee program. The TLGP does not rely on either the taxpayer or the DIF to achieve its goals. Participants in the program are assessed a fee for coverage. If these fees do not cover the full cost of the TLGP, the FDIC will impose a special assessment under the systemic risk provisions of the Federal Deposit Insurance Act.

On March 23, 2009, the FDIC and the Department of the Treasury jointly announced the establishment of a new Legacy Loans Program (LLP) that will help remove distressed loans from the balance sheets of financial institutions and allow them to begin attracting private capital again. Under the program, the FDIC will facilitate the sale of pools of distressed loans to Public-Private Investment Funds (PPIFs) by financial institutions. The PPIFs will be jointly funded by private investors and the Department of the Treasury, with oversight by the FDIC. Each PPIF will issue debt guaranteed by the FDIC.

Communication and coordination with the other bank regulatory agencies are top priorities. As the insurer, the FDIC by statute has special examination authority for all insured depository institutions. If significant emerging risks or other serious concerns are identified for an insured depository institution for which the FDIC is not the primary federal supervisor, the FDIC and the institution's primary federal supervisor work together to address those risks or concerns.¹

The FDIC may approve or deny an application for federal deposit insurance from any prospective depository institution. Before granting access to the federal deposit insurance system, the FDIC evaluates an applicant’s potential risk to the DIF. It assesses the adequacy of an applicant’s capital, future earnings potential and the general character of its management. The FDIC also considers the convenience and needs of the community to be served and gathers input from other regulatory authorities.

The FDIC seeks to increase public awareness and understanding of deposit insurance rules and coverage. The FDIC and other federal regulatory agencies ensure that insured depository institutions make accurate disclosures about uninsured products. The FDIC also provides information to depositors and financial institution staff about the application of deposit insurance rules, provides tools to assist financial institution employees in interpreting the rules for deposit insurance coverage and responds to deposit insurance questions received from the public and the banking industry through the FDIC Call Center, the Internet and regular mail.

¹ An institution’s charter and its Federal Reserve System membership status determine which federal banking agency is the institution’s primary federal supervisor.

Indicator and Targets

1. Number of business days after an institution failure that depositors have access to insured funds either through transfer of deposits to the successor insured depository institution or depositor payout
   • Depositors have access to insured funds within one business day if the failure occurs on a Friday.
   • Depositors have access to insured funds within two business days if the failure occurs on any other day of the week.

2. Insured depositor losses resulting from a financial institution failure
   • There are no depositor losses on insured deposits.
   • No appropriated funds are required to pay insured depositors

Means and Strategies

Operational Processes (initiatives and strategies):
When an insured institution is identified as a potential failure, the FDIC prepares a plan to handle the possible resolution of the institution. The FDIC begins the resolution process with an assessment of the institution’s assets and liabilities. The FDIC then develops an information package that is used as a marketing tool and is provided to all interested potential assuming institutions. The FDIC solicits proposals from approved bidders to find a buyer for the deposit franchise.

If the federal or state supervisor chooses to close the institution, the FDIC takes control of the failed institution and determines which deposits are insured. Once the FDIC is appointed receiver, it initiates the resolution process for the failed institution and provides the insured depositors with access to their accounts within one or two business days. The FDIC works with the assuming institution so that the insured deposit accounts are transferred to it as soon as possible. If no assuming institution is found during the resolution process, the FDIC disburses insured deposit balances directly to customers of the failed institution.

As banking industry practices and technologies evolve, the FDIC continues to review and enhance existing plans, processes and systems in response to potential risks that might impact the resolution process.

Human Resources (staffing and training):
Staffing requirements are continually assessed in light of current and projected resolutions and receivership management workload. The FDIC maintains a permanent staffing platform that ensures its readiness to respond quickly to potential new failures. This permanent staffing platform can be quickly expanded through the addition of non-permanent employees and contractor staff. In addition, the Corporation has actively promoted a flexible workforce through the cross-training of employees elsewhere within the organization to assist with an unexpected increase in failure activity. Cross-training is reinforced through training updates and rotational work assignments.

Information Technology:
Technology is critical to improving the efficiency of deposit insurance determinations and payments. The FDIC is in the midst of a multi-year effort to redesign and automate its deposit insurance claims and payment processes. This project, approved in late 2006, will provide an integrated solution that meets the Corporation’s current and future deposit insurance determination needs and will be based on adaptable technology that is compatible with industry standards. In 2009, the Corporation will continue to develop the new Claims Administration System to replace current systems used for this purpose.

Verification and Validation
Potentially heightened insurance risks identified through the Dedicated Examiner, LIDI and SNC programs are used to develop appropriate supervisory strategies. Follow-up activities are tracked through established reporting processes. Analyses of emerging risks and trends in the financial industry or the broader economy are reviewed by the Risk Analysis Center and the National Risk Committee. The FDIC Board of Directors is briefed periodically on these risks, which are communicated internally and externally through numerous FDIC publications and written reports.

2008 Performance Results
This annual performance goal and its associated performance indicators and targets are unchanged from 2008. There were 25 insured financial institution failures during 2008, and the FDIC successfully met the performance targets for each failure.

Strategic Objective 1.2
The FDIC promptly identifies and responds to potential risks to the DIF.

Annual Performance Goal 1.2-1
Identify and address risks to the DIF.

Indicator and Targets

1. Insurance risks posed by large insured depository institutions
   • Assess the insurance risks in all insured depository institutions and adopt appropriate strategies.

2. Concerns referred for examination or other action
   • Identify and follow up on all material issues raised through offsite review and analysis.

3. Emerging risks to the DIF
   • Identify and analyze existing and emerging areas of risk.

Means and Strategies

Operational Processes (initiatives and strategies):
The assets within the U.S. banking system today are increasingly concentrated in large insured institutions. The FDIC has established a separate Complex Financial Institutions Branch within the Division of Supervision and Consumer Protection to assess the risks posed to the DIF by these institutions. This branch has assigned dedicated examiners to the four largest insured financial institutions and has increased its oversight of all banks deemed systemically important. Branch staff maintains close contact with each institution's primary federal regulator and other FDIC offices to evaluate the institution’s condition, identify potential emerging risks, and assign an FDIC risk rating for the institution.

The FDIC has also established the Large Insured Depository Institutions (LIDI) Program to assess and report on emerging risks at all institutions with total assets of $10 billion or more as well as other selected institutions. Under this program, regional case managers perform ongoing analysis of emerging risks within each insured institution and assign a quarterly risk rating. Case managers also maintain contact with the primary federal regulator for each institution in the LIDI Program. Data obtained through this program are analyzed, and key issues are reported to corporate executives regularly for use in policy and operational discussions. In addition, senior financial institution analysts within the Complex Financial Institutions Branch complete offsite analyses in order to meet the Corporation’s risk information needs and form appropriate supervisory strategies.

Information from the Shared National Credit (SNC) program is also integrated into the analysis of emerging risks at large banks. This interagency program provides for annual reviews of certain syndicated loans that total over $20 million and are shared by three or more regulated entities. Using SNC information, FDIC staff identifies industry sector exposures posing a high degree of risk for large banks and analyzes underwriting and industry performance trends. This information is used to develop risk briefings and other risk assessment presentations.

Human Resources (staffing and training):
The Complex Financial Institutions Branch includes dedicated examiners, examination specialists, and senior analysts. Its authorized staffing has been expanded in 2009 to address the increased risk in the largest banking companies. The Corporation is also developing a large bank training program and continues to recruit personnel with the specialized knowledge and skill sets to analyze large bank operations.

Information Technology:
The LIDI database is used to maintain written analysis and specific reports on all insured financial institutions with assets of $10 billion or more.

Verification and Validation
Potentially heightened insurance risks identified through the Dedicated Examiner, LIDI and SNC programs are used to develop appropriate supervisory strategies. Follow-up activities are tracked through established reporting processes. Analyses of emerging risks and trends in the financial industry or the broader economy are reviewed by the Risk Analysis Center and the National Risk Committee. The FDIC Board of Directors is briefed periodically on these risks, which are communicated internally and externally through numerous FDIC publications and written reports.

2008 Performance Results
This annual performance goal and its associated performance indicators and targets are unchanged from 2008. In 2008, the FDIC successfully met all of these targets.

Annual Performance Goal 1.2-2
Disseminate data and analyses on issues and risks affecting the financial services industry to bankers, supervisors, the public and other stakeholders.

Indicator and Targets
1. Scope and timeliness of information dissemination on identified or potential issues and risks.

• Disseminate results of research and analyses in a timely manner through regular publications, ad hoc reports and other means.
• Undertake industry outreach activities to inform bankers and other stakeholders about current trends, concerns and other available FDIC resources.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC maintains a vigorous research and publications program on issues and topics of importance to the banking industry. Much of this research is conducted in collaboration with the academic community through the Center for Financial Research (CFR). Research findings are disseminated through CFR working papers, articles in professional journals and presentations at conferences and other events.
The FDIC also disseminates information and analyses on industry risks through periodic reports, publications (e.g., the FDIC Quarterly Banking Profile and the FDIC Quarterly), Financial Institution Letters and participation in industry events and other outreach activities.

The FDIC conducts outreach sessions several times each year throughout the country. In addition, FDIC employees regularly attend conferences and meet with industry analysts and trade groups to exchange views and analyses. They also present Directors’ College outreach sessions to local bank board members. During these sessions, information on current risks, new regulations and other emerging issues is communicated to bank directors. In addition, banker roundtable events are conducted by local FDIC offices nationwide to provide a forum for bankers to receive information and raise questions about new regulatory guidance or emerging risks.

Human Resources (staffing and training):
The FDIC employs economists, financial analysts and other staff members who monitor risks within the banking industry and communicate those risks to FDIC management, other regulators, the industry, the public and other stakeholders through a variety of media and forums. In addition, outside scholars participate in the Corporation’s risk analysis program, and risk-focused examination training has been incorporated into the FDIC’s examination schools. The FDIC also maintains a cadre of staff members throughout the country to conduct banker outreach sessions.

Information Technology:
The FDIC’s website (www.FDIC.gov) is a centralized source of information on FDIC research and analysis on potential areas of risk for the industry, the public and other regulators. In addition, the use of recently developed, open data exchange standards (known as “eXtensible Business Reporting Language,” or XBRL) provides faster access to financial institution information for all users of the data, including financial institutions, bank regulators and the public.

Verification and Validation
Timely analyses of banking industry risks are included in regular publications or as ad hoc reports. Industry outreach activities aimed at the banking community and industry trade groups promote discussion of current trends and concerns, and inform bankers about available FDIC resources. Publications and outreach events are documented through established reporting processes.

2008 Performance Results
This annual performance goal and its associated performance indicator and targets are unchanged from 2008. In 2008, the FDIC successfully met these performance targets.

Annual Performance Goal 1.2-3
Effectively administer temporary financial stability programs.

Indicator and Targets

1. Administration of the TLGP
   • Provide liquidity to the banking system by guaranteeing non-interest bearing transaction deposit accounts and new senior unsecured debt issued by eligible institutions under the TLGP.
   • Implement an orderly phase-out of new guarantees under the program when the period for issuance of new debt expiress.

2. Administration of the Capital Purchase Program (CPP)
   • Substantially complete by September 30, 2009, the review of and recommendations to the Department of the Treasury on CPP applications from FDIC-supervised institutions.

3. Implementation of the LLP
   • Expeditiously implement procedures for the LLP, including the guarantee to be provided for debt issued by PPIFs, and provide information to financial institutions and private investors potentially interested in participating.

4. Oversight of the use of financial stability resources by FDIC-supervised institutions
   • Expeditiously implement procedures to review the use of CPP funds, TLGP guarantees, and other resources made available under financial stability programs during examinations of participating FDIC-supervised institutions.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC established the TLGP in October 2008 to help relieve the crisis in the credit markets and provide banks with access to liquidity. The TLGP has two components: the transaction account guarantee program, a full guarantee of all deposits in non-interest bearing transaction accounts, regardless of the dollar amount, through December 31, 2009; and the debt guarantee program, a guarantee of senior, unsecured debt issued by insured depository institutions and certain holding companies through December 31, 2012. The TLGP does not rely on taxpayer funding or the DIF to achieve its goals; program participants pay assessments to participate in the program. If these fees ultimately fail to cover TLGP costs, the FDIC will impose a special assessment on all insured depository institutions under the systemic risk provisions of the Federal Deposit Insurance Act.

The FDIC conducts outreach sessions several times each year throughout the country. In addition, FDIC employees regularly attend conferences and meet with industry analysts and trade groups to exchange views and analyses. They also present Directors’ College outreach sessions to local bank board members. During these sessions, information on current risks, new regulations and other emerging issues is communicated to bank directors. In addition, banker roundtable events are conducted by local FDIC offices nationwide to provide a forum for bankers to receive information and raise questions about new regulatory guidance or emerging risks.

The CPP was established by the Department of the Treasury under authority provided in the Emergency Economic Stabilization Act of 2008 (EESA), which was signed into law in October 2008. The Department of the Treasury allocated to the CPP to purchase senior preferred securities in financial institutions on standardized terms $250 billion of the $700 billion in funding authority provided for the EESA’s Troubled Asset Relief Program. Qualifying U.S. controlled banks, savings associations, and certain bank and savings and loan holding companies engaged primarily in financial activities are eligible to file applications for CPP funds with their primary federal regulators.

The FDIC has instituted a robust review and analysis process for applications filed by FDIC-supervised institutions to participate in the CPP. This process is based on the participation guidelines set by the Department of the Treasury. If applicants meet established guidelines for participation, the application is submitted to the Department of the Treasury with a recommendation for approval. During the fourth quarter of 2008, the FDIC received 1,600 CPP applications. It completed the review process and recommended for approval 250 of these applications. Processing of CPP applications will continue in 2009. A substantial number of additional applications are expected to be received during the first half of the year.

When an FDIC-supervised institution is approved for participation in the CPP, the FDIC will review its use of the CPP proceeds and compliance with the terms of the Department of the Treasury’s Securities Purchase Agreement during scheduled bank examinations. Guidelines for these reviews were issued to field examiners in February 2009. Additional review procedures will be established during 2009 to monitor the use of TLGP guarantees by participating FDIC-supervised institutions and the use of other financial stability program resources, as necessary.

The FDIC also established in March 2009 the LLP to facilitate the sale of distressed loans by financial institutions to PPIFs. The PPIFs will be jointly funded by private investors and the Department of the Treasury. Each PPIF will also issue debt guaranteed by the FDIC. The FDIC will oversee and monitor the PPIFs and report periodically on their activities. The FDIC expects to issue procedures governing the LLP and initiate a pilot loan pool sale by mid-2009.

Human Resources (staffing and training):
Implementation of the TLGP and review of CPP applications have required significant staffing resources. A TLGP working group composed of senior staff from various FDIC divisions oversees implementation of the TLGP and recommends further enhancements to the program. A substantial number of FDIC supervisory staff has also been temporarily deployed to review CPP applications and make appropriate recommendations to the Department of the Treasury. In addition, examination support staff are developing review procedures to be followed by field examiners to monitor the use of CPP funds, TLGP guarantees, and other financial stability resources by participating FDIC-supervised institutions. During 2009, examination staff in the FDIC’s six regions will be directly involved in efforts to monitor compliance by participating entities with the rules governing both CPP and the debt guarantee program.

The resource requirements for the LLP are still being determined. These requirements are expected to be met through a combination of FDIC staff and contract assistance. An interdivisional working group is in the process of determining specific resource needs and sources

Information Technology:
Various financial, supervisory, and receivership data systems, as well as publicly available market information, will be used to monitor participation in the TLGP. In addition, an application tracking database and a document warehouse were implemented in November 2008 to track CPP applications.

Verification and Validation
Progress in achieving the performance targets for this annual performance goal will be monitored primarily through established management reporting processes. In addition, review procedures for participating FDIC-supervised institutions will be established through the issuance of formal written guidelines to examination staff.

2008 Performance Results
This annual performance goal and its associated performance indicators and targets are new for 2009.

Strategic Objective 1.3
The DIF and the deposit insurance system remain strong and adequately financed.

Annual Performance Goal 1.3-1
Maintain and improve the deposit insurance system.

Indicator and Targets

1. Enhance the risk-based pricing system
   • Adopt and implement revisions to the pricing regulations that provide for greater risk differentiation among insured depository institutions reflecting both the probability of default and loss in the event of default.
   • Revise the guidelines and enhance the additional risk measures used to adjust assessment rates for large institutions.


2. Loss reserves
   • Ensure the effectiveness of the reserving methodology by applying sophisticated analytical techniques to review variances between projected losses and actual losses and by adjusting the methodology accordingly.


3. Fund adequacy
• Set assessment rates to restore the insurance fund reserve ratio to at least 1.15 percent of estimated insured deposits by year-end 2015.
• Monitor progress in achieving the restoration plan.

Means and Strategies

Operational Processes (initiatives and strategies):
In February 2009, the FDIC Board of Directors adopted revisions to the deposit insurance pricing structure to better reflect the risks posed to the DIF by individual insured institutions. In addition to implementing these changes, during 2009 the FDIC will enhance its oversight of “systemically important” insured institutions and other large/complex insured institutions that pose significant risk to the DIF, including risk exposure attributable to loss-sharing agreements and debt guarantees.

The FDIC’s Financial Risk Committee (FRC) develops quarterly failure projections and loss estimates to establish contingent loss reserves for the DIF. The FRC continues to enhance the techniques and methodologies used to analyze the nature of risk exposure, including scenario analysis and stress testing. Models that forecast failures and failure resolution costs are maintained and enhanced, as necessary. The FRC regularly reviews adverse events to identify lessons or implications for monitoring and addressing risks. The FRC consults with the other federal banking agencies in its deliberations.

Based on an analysis of projected failed bank assets and other pertinent information, the FRC recommends to the Chief Financial Officer the level of the contingent loss reserve for the DIF, as determined by the FDIC’s reserving methodology. FDIC staff also uses the information provided by the FRC on projected insurance losses as one factor in determining the level of assessment revenue necessary to maintain adequate funding in the DIF. Projected insurance losses, as well as projections of investment revenue, operating expenses and insured deposit growth, are key elements in estimating assessment revenue needs.

The Federal Deposit Insurance Reform Act of 2005 requires that the FDIC Board of Directors adopt a restoration plan when the Deposit Insurance Fund reserve ratio falls below 1.15 percent or is expected to do so within six months. The reserve ratio fell below the required range in 2008 due to financial institution failures, and was at 0.40 percent as of December 31, 2008 (based on unaudited fund balance results). The Board adopted a restoration plan on October 7, 2008, to increase the fund’s reserve ratio to at least 1.15 percent no later than five years after the plan’s establishment (absent extraordinary circumstances), as required by statute. It subsequently modified that plan on February 27, 2009, to extend to seven years the target timeframe for restoring the reserve ratio to 1.15 percent due to extraordinary circumstances. As a part of that revised plan, the Board also increased assessment rates and made other changes to the assessment system that are largely intended to ensure that riskier institutions bear a greater share of the proposed assessment increases.

The Board also adopted an interim rule in February 2009 imposing a special assessment on all insured institutions on June 30, 2009 (to be collected on September 30).

The interim rule would also permit the FDIC Board to impose an additional special assessment at the end of any calendar quarter (after June 30, 2009) when the FDIC estimates that the reserve ratio will fall to a level close to or below zero or to a level that would adversely affect public confidence.

Human Resources (staffing and training):
Staff in the FDIC’s Washington, D.C., office administers and performs the analytical work associated with deposit insurance pricing. The FDIC will continue to add staff to its banking and economic research program and to expand its ties to the academic community to broaden the information and analytical perspectives available to the Corporation as steward of the DIF. Outside scholars will be actively engaged in producing relevant research through CFR-sponsored relationships and activities.

Information Technology:
The Risk-Rated Premium System (RRPS) calculates the premiums that financial institutions are assessed for deposit insurance. Development of a new version of RRPS began in 2008 to reflect the revised insurance assessment pricing structure. The version will be tested and implemented in 2009.

Verification and Validation
To ensure that the RRPS identifies higher risk institutions and appropriately assesses higher insurance premiums, the FDIC reviews on an ongoing basis the assessment history of all failed insured depository institutions and determines whether the system is working adequately.

The Government Accountability Office reviews the methodology used to determine the contingent loss reserve annually. In 2009, the FRC will again conduct semiannual reviews of the contingent loss reserve methodology through an analysis of the variance between projected and actual losses.

The status of the restoration plan will be reviewed by the FDIC Board regularly.

2008 Performance Results
This annual performance goal is unchanged from 2008, although the performance indicator and several performance targets have been updated for 2009. The FDIC successfully met most of the performance targets established for this goal, although it failed to maintain the reserve ratio within its target range in 2008 due to a substantial increase in the number of insured institution failures. The reserve ratio fell below 1.15 percent in mid-2008 and has continued to decline. The Corporation took into account its analysis of the causes of insured institution failures in 2008 and the elevated risk profile of many insured institutions in establishing the 2009 performance targets for this goal. 

Annual Performance Goal 1.3-2
Expand and strengthen the FDIC’s participation and leadership role in providing technical guidance, training, consulting services and information to international governmental banking and deposit insurance organizations.

Indicator and Targets

1. Scope of information sharing and assistance available to international governmental bank regulatory and deposit insurance entities
   • Undertake outreach activities to inform and train foreign bank regulators and deposit insurers.
   • Foster strong relationships with international banking regulators and associations that promote sound banking supervision and regulation, failure resolution and deposit insurance practices.

Means and Strategies

Operational Processes (initiatives and strategies):
Recent events have underscored the important role that deposit insurance systems play in maintaining financial stability. The FDIC pursues a variety of activities that are intended to develop cooperative relationships and information sharing with international deposit insurance and bank regulatory entities and foreign governmental banking regulators. The FDIC’s Office of International Affairs (OIA), which was established in 2006, plans and conducts training sessions; coordinates technical assistance missions, foreign visits, and bilateral consultations with foreign bank supervisors, deposit insurers and bank resolution authorities; participates actively and plays a leadership role in international organizations; and performs other related activities in support of this annual performance goal.

Human Resources (staffing and training):
The FDIC will consider each international request for assistance from a strategic perspective and will appropriately leverage its resources to address these requests. Resources include a small permanent OIA staff and temporary detail assignments for selected FDIC employees. In 2009, the FDIC will evaluate opportunities to secure former FDIC employees to support the international program and enhance the FDIC’s leadership role in regional and international bank supervision, failure resolution, and deposit insurance groups.

Information Technology:
Information about international governmental bank regulatory or deposit insurance activities and the FDIC’s international program are communicated through OIA’s website.

Verification and Validation
Achievement of this annual performance goal will be demonstrated through enhanced FDIC participation and leadership roles in key international organizations. Progress in meeting this annual goal will be tracked by the FDIC’s International Affairs Working Group through established reporting processes.

2008 Performance Results
This annual performance goal and its associated performance indicator and targets are unchanged from 2008. The FDIC successfully met both performance targets in 2008.

Strategic Objective 1.4
The FDIC resolves the failure of insured depository institutions in the manner least-costly to the DIF.

Annual Performance Goal 1.4-1
Market failing institutions to all known qualified and interested potential bidders.

Indicator and Targets

1. Scope of qualified and interested bidders solicited
   • Contact all known qualified and interested bidders.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC markets the deposits and assets of failing institutions to all known qualified and interested potential bidders to stimulate as much competition as possible. The FDIC maintains an inventory of qualified financial institutions that may potentially be interested in bidding to purchase a failing institution. In preparing a list of potential bidders for each failing institution, the FDIC takes into account the failed institution’s geographic location, competitive environment, minority-owned status, financial condition, asset size, capital level and regulatory ratings. The FDIC contacts these potential bidders and holds an informational meeting and/or uses the Internet to provide information on the failing institution. Potential bidders are then given the opportunity to perform due diligence on the failing institution’s assets and liabilities before determining whether to submit bids.

Human Resources (staffing and training):
Franchise marketing is carried out primarily by specialized FDIC personnel with support from staff from other disciplines and contractors, as needed. Staffing requirements are continually assessed within the context of current and projected workload to ensure that the FDIC also uses contractor support, the hiring of non-permanent employees, and the temporary assignment of resources from the Corporation to meet workload demands and mission responsibilities in this area. The Corporation is in the midst of developing a new Resolutions and Receiverships Commissioning Program to ensure the future availability of qualified personnel to handle all of its insurance and receivership management responsibilities, including the resolution of failing institutions.

Information Technology:
The FDIC implemented a new asset management and servicing system (4-C) in 2007 that replaced a number of legacy systems with more current and secure technology. In August 2008, the FDIC implemented enhancements to 4-C that added franchise and asset marketing capabilities. These enhancements replaced several standalone applications that were used to support those functions. Franchise marketing activities are now tracked through 4-C.

Verification and Validation
The franchise marketing process is tracked in 4-C, and data from this system are used to report on marketing and sales progress.

2008 Performance Results
This annual performance goal and its associated performance indicator and target are unchanged from 2008. The 2008 performance target was successfully met for the 25 failures of insured financial institutions that occurred during 2008.

Strategic Objective 1.5
The public and FDIC-insured depository institutions have access to accurate and easily understood information about federal deposit insurance coverage.

Annual Performance Goal 1.5-1
Provide educational information to insured depository institutions and their customers to help them understand the rules for determining the amount of insurance coverage on deposit accounts.

Indicator and Targets

1. Timeliness of responses to deposit insurance coverage inquiries
   • Respond to 90 percent of written inquiries from consumers and bankers about FDIC deposit insurance coverage within two weeks.

2. Public education campaign to increase awareness of deposit insurance changes and expected 2010 changes
   • Conduct at least three sets of the Deposit Insurance Seminars/teleconferences per quarter for bankers.
   • Enter into deposit insurance educational partnerships with consumer organizations to educate consumers
   • Expand avenues for publicizing deposit insurance rules and resources to consumers through a variety of media.

Means and Strategies

Operational Processes (initiatives and strategies):
The FDIC uses a variety of means to educate insured financial institution employees and depositors about FDIC deposit insurance coverage. In addition to conducting seminars for bank employees, the FDIC encourages the dissemination of educational information through the banking industry and the media. In 2009, the FDIC will update all deposit insurance educational tools and publications to reflect statutory and regulatory changes made during 2008 and early 2009 in the Emergency Economic Stabilization Act, the TLGP, and the simplification of FDIC rules for coverage of revocable trust accounts. The FDIC works with insured financial institutions to encourage them to use these tools and to make the FDIC’s publications available to bank employees and customers. The FDIC also operates a toll-free call center (877-ASK-FDIC) staffed by deposit insurance specialists, maintains education resources on the FDIC’s website, publishes articles on insurance coverage rules in FDIC Consumer News (a quarterly newsletter for consumers published by the FDIC), and works to raise awareness of deposit insurance coverage through the national and regional news media.

Human Resources (staffing and training):
The FDIC has a dedicated staff of deposit insurance specialists that respond to inquiries and administer public education programs on deposit insurance. Staffing and training needs are reviewed on an ongoing basis to ensure that the resources supporting deposit insurance educational initiatives are adequate and that employees possess the skills and knowledge to implement this program effectively and successfully. Due to the elevated level of deposit insurance inquiries since mid-2008, additional staff and contract support have been authorized for this function.

Information Technology:
The FDIC tracks the receipt of and response to written banker and public inquiries about the FDIC’s deposit insurance program through the Specialized Tracking and Reporting System (STARS). In 2008, the Corporation consolidated the two existing versions of the Electronic Deposit Insurance Estimator (EDIE) – Online EDIE for Consumers and EDIE for Bankers – into one application. During 2009, the FDIC will continue to update EDIE to ensure all statutory and regulatory changes are incorporated, as well as enhance STARS to address the tracking and reporting of tens of thousands of consumer and banker inquiries. The FDIC will also continue to use the Internet and teleconferencing technology to reach large audiences of financial institution employees and to deliver deposit insurance educational tools and materials to the banking community and the public.

Verification and Validation
Progress in meeting the performance targets for this goal will be tracked through STARS and established reporting processes.

2008 Performance Results
This annual performance goal as well as performance indicator #1 and its associated performance target are essentially unchanged from 2008. Performance indicator #2 and the associated performance targets are new for 2009.