You may have seen the startling news yesterday: The Federal Deposit Insurance Corp. reported that its insurance fund, which essentially protects bank deposits from disappearing, dropped to its lowest level in nearly 16 years.

The FDIC fund shrank 20 percent in the second quarter to $10.4 billion, due to 81 bank failures this year, the most since 1992. Just last year the fund had a healthy $52.8 billion.

And the bleeding isn’t over yet. The banking industry lost $3.7 billion in the second quarter, causing the FDIC to flag 111 additional “problem banks” for a total of 416.

Before you panic, here’s the good news: Your money is safe. Even though the dwindling fund threatens an economic recovery, the government guarantees it won’t threaten standard bank deposits. FDIC chair Sheila Bair stressed at a press conference yesterday that her agency has “ample resources to continue protecting insured depositors.”

Since the FDIC was created in 1933, no one has lost a cent from an insured deposit. So if your bank fails, the FDIC still has got your back.

Well, really, the Treasury Department has it.

In May, President Obama signed a bill that raises the FDIC’s permanent borrowing authority from Treasury to $100 billion, up from $30 billion. The bill also allows the FDIC to tap a $500 billion line of credit from Treasury through 2010.

Bair says the FDIC has no plans to borrow from Treasury, though she cautioned, “I never say never.”

For now, Bair said she’s confident that the fund is large enough to sustain itself through upcoming bank failures. The FDIC already has adjusted the fund’s balance downward for the expected cost of bank failures over the next year, she said. And while the insurance fund is down to $10.4 billion, the FDIC has a separate “contingent loss-reserve” fund stocked with an additional $32 billion.

The FDIC also is likely to slap banks with a special fee or higher insurance premiums, which typically pay for the fund.

Although the fund may be safe, these methods for keeping it afloat have their major drawbacks.

The Treasury lifeline is intended to be only an emergency borrowing program, and is, of course, still financed by taxpayers. The FDIC hasn’t borrowed from Treasury since the savings and loan crisis in the 1990s and is trying to avoid doing it now.

But the alternative—charging banks heftier fees—isn’t pretty either. The FDIC already has raised bank fees this year, which many found burdensome.

The FDIC’s board this week also approved controversial rules that will allow risk-taking private equity firms to snatch up failing banks. The move was an attempt to ease the burden bank failures are having on the fund.

We’ll keep tracking the FDIC’s moves and update you when we know more.