Banks Brawl Over Refilling FDIC Fund Hit by SVB, Signature Fails

A proposal to make the biggest banks bear the costs of backstopping the failures of Silicon Valley Bank and Signature Bank drew fire from the targeted institutions.

The Federal Deposit Insurance Corp. in May proposed a special assessment on banks with over $5 billion in assets to cover the costs of the roughly $15.8 billion hit to the agency’s deposit insurance fund used to support SVB and Signature’s uninsured depositors.

The payouts to uninsured depositors came after federal regulators invoked what is known as the “systemic risk exemption,” which allows the FDIC to fully protect all of a bank’s depositors, ...