FDIC to Sell IndyMac Whole, or in Pieces

The Federal Deposit Insurance Corp. is planning to sell IndyMac Bank as a whole unit or in pieces, and the marketing will probably begin in September. "We will widely market it, and we hope to generate a lot of interest," FDIC Chairman Sheila Bair said. The FDIC took over the failed $32 billion Pasadena, Calif.-based thrift on July 11. The agency originally estimated that the failure would cost the FDIC insurance fund $4 billion to $8 billion. However, further evaluation of the assets showed that the insurance fund may have to pay out $8.9 billion to cover losses. Bank failures this year have reduced the FDIC reserve ratio below the statutory minimum 1.05% level, and the FDIC board will consider a "restoration plan" in early October that likely will increase deposit insurance premiums. The FDIC board will also be proposing changes to the current assessment system to shift the burden to riskier banks, Ms. Bair said, including banks that rely heavily on brokered deposits and secured liabilities, such as Federal Home Loan Bank advances.