“I hope you will report this in a way that depositors don’t get scared,” the chairman of the Federal Deposit Insurance Corporation told reporters Tuesday.

The potentially frightening news is that the FDIC’s insurance fund ”“ used to pay off depositors when banks fail ”“ is running out of money and must raise $45 billion to cover still more expected failures.

The FDIC’s mission is to prevent banking panics, which it does by insuring depositors against losses of up to $250,000 per account. Unfortunately, the growing cost of bank failures threatens to entirely consume the agency’s insurance fund by next year.

To keep the fund out of the red, the FDIC proposes to require banks to prepay their premiums for deposit insurance through 2012. An expert interviewed by the Associated Press called this a “one-time accounting gimmick,” but it promises to solve a difficult problem with no impact on the U.S. Treasury through a workable arrangement with banks.

Created during the 1930s to stop a series of runs on banks, FDIC is financed by annual fees on banks, and backed by the federal government. This federal backing means that even if the fund runs dry, depositors will be rescued in the event of a bank failure. “For depositors, this is a nonevent,” said Sheila C. Bair, chairman of the FDIC.

Yet it’s a clear sign of the continued weakness of the banking system. The agency is finding that the number of bank failures continues to rise, and forecasts that the cost of bank failures will eventually rise to about $100 billion.

Fortunately, this cost will be borne by the banks, not the taxpayers. And by structuring the infusion as prepayments of their regular premiums, banks can account for them over the next three years. The arrangement will help banks’ balance sheets, though it will reduce the amount of money available for lending.

We can still hope that recovery will stem the rate of bank failures, but this plan seems to ensure that the FDIC will be ready for more bad news.

— Questions? Comments? Contact Kristen Schulze Muszynski or Nick Cowenhoven at 282-1535 or kristenm@journaltribune.com or nickc@journaltribune.com.