The Federal Deposit Insurance Corp. (FDIC) board of directors has approved a seven-basis point hike in deposit insurance premiums for 2009 to address the high cost of bank failures and a declining reserve ratio.

The across-the-board premium hike will raise assessments for most healthy banks from 5 basis points to 12 basis points and doubled first quarter assessment revenue to $2.3 billion.

FDIC staff estimate that bank failures in 2008 will cost the Deposit Insurance fund $18.9 billion. And, its reserve ratio has sunk from 1.19% on March 31 to 0.76% as of Sept. 30.

Meanwhile, the agency is boosting its operating budget by nearly 85% to $2.2 billion to deal with a rising number of bank failures and receiverships in 2009.

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