Sheila Bair, chairman of the Federal Deposit Insurance Corporation, speaks during a news briefing in Washington, D.C.
Sheila Bair, chairman of the Federal Deposit Insurance Corporation, speaks during a news briefing in Washington, D.C. - 
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Kai Ryssdal: We told you a week or so ago that the Federal Deposit Insurance Corporation is in a bit of a squeeze. Its bank insurance fund was down to a mere $10 billion. Not as much as it might sound given the pace of bank failures this year, and to come perhaps.

Today the FDIC said it expects banks gone bust to cost $100 billion over the next four years and that its insurance fund could be out of cash by the end of the month. This month. Your money is safe, don't mishear what I said. But Marketplace's Steve Henn tell us the FDIC is doing everything it can to avoid asking for a bailout.

STEVE HENN: The FDIC is basically bank insurance. It guarantees your deposits by charging banks a premium.

But in the last three months, 50 banks have failed. And the agency's insurance fund will actually go into the red tomorrow. Still, Richard Bove, a banking analyst at Rochdale Securities says, don't panic, the FDIC has got your back.

RICHARD BOVE: It still has the ability to go to the Congress and ask for $150 all the way up to $500 billion, but it doesn't dare do so. In other words, the political backlash would be so enormous.

Instead, the agency asked banks for three years of premiums up front. This will bring in about $45 billion.

BOVE: But it isn't going to be enough.

Richard Bove.

BOVE: They're going to have to ask for more from the banks in the next few years even though they're saying they won't.

That's because Bove expects at least 200 more banks to fail.

And banking consultant Bert Ely says this is costing the FDIC more than it should because banks are in such bad shape by the time the FDIC steps in and takes them over.

BERT ELY: I find these high loss rates very, very troubling. Frankly it's an indication of really significant regulatory failure that the losses have gotten as bad as they are.

Last Friday the FDIC closed a bank in Georgia and immediately had to just write off 45 percent of the bank's value. Losses that bad were almost unheard of in the S&L crisis. And until losses come down, Ely says the FDIC will continue to burn through its cash.

In Washington, I'm Steve Henn for Marketplace.