Lowest reserves since 1993.
The fund held $52.4 billion at the beginning of 2008. One year and 25 bank failures later, the fund held $18.9 billion.So far this year, 14 banks have failed, draining another $1.7 billion from the insurance fund.
If money cannot be collected quickly enough from the industry, the FDIC could be forced to borrow money from taxpayers by taking a loan from the Treasury Department.
Some banking trade groups favor that approach, because they say that a sharp increase in the assessment on banks would overly burden a struggling industry, taking away money that banks otherwise could use to lend. Banks would then repay the money gradually and as the industry's situation improved.
The taxpayer always has more money to give away to the banking industry. The purpose of the taxpayer is to support industries that sponge money off of taxpayers.
At least that is how things seem to work.
Sheila Bair
I watched Cramer's special and she said they were increasing the requirements of the insurance for banks.
Is this calculated into this? That show aired yesterday.
Full Nationalization
complete with the backing of the full faith and credit of the US government is the only option.
And this should be an immanent "learning opportunity" for the the financial crowd.
Either we have responsible regulation, or you shits lose your money and your jobs. All your bases are belong to us.
This could be a real cluster... if we hit rock bottom in FDIC terms, then the crisis is extended because the belief in the FDIC having been punctured, the only rational thing for an individual to do is to run faster to their bank.......
consequences of nationalization
I've been on the "let's do Sweden" bandwagon ever since I studied up on various solutions to systemic collapse.
But I guess I need to revisit that to find out what are the immediate pain consequences for I am sure it's like ripping off a band-aid really fast.
This clearly isn't working and is just robbing the U.S. taxpayer blind.
I think that we should nationalize,
and keep it nationalized for at least a generation.
There has to be some discipline introduced, so that there isn't rampant speculation.
And, nationalization offers a real stimulus of its own. Something north of 45% of the US economy is transaction costs.
Think about the case of retail transactions.
Currently, the bank skims off 1% plus of the transaction in charges. If you had a common, government backed bank, that could create an electronic currency that all would have access to, then you could end this rent seeking behavior.
Bank transaction fees have the same effect on preventing marginal transactions as a tax.......
jez
how about strong regulation? That's yet another one, transaction fees (which I believe MC, Visa are raking in the $$ on).
FDIC emergency fee
AP: