Markets on alert after [Spanish] bank bailout

FEARS of further turbulence in the financial markets mounted yesterday as Spain was forced to bail out one of its biggest regional banks, adding to worries about the eurozone.

Spain’s central bank took operational control of Cajasur, one of 44 large regional lenders that account for about half the Spanish banking market. It will need an immediate cash injection of €500m (£430m).

The intervention has heightened concerns that Spain’s regional lenders could put added strain on its public finances. The collapse of the Spanish property market has left the regional banks with an estimated €300 billion bad-debt problem. Concern about Spain’s banks is one of the worries that have been hanging over the eurozone in recent weeks.

Jean-Claude Trichet, head of the European Central Bank, added to eurozone woes when he warned Portugal that it must act immediately to cut its budget deficit.

Meanwhile, Britain’s economic growth is set to be revised higher this week, adding to recent evidence of recovery. The figures are unlikely to calm market nerves, however, after last week’s big sell-off triggered by problems in the eurozone.

Britain’s gross domestic product growth for the first quarter, initially estimated at only 0.2%, is set for an upward revision after news of a strong bounce for manufacturing in March. It follows figures last week showing a 6% rise in business investment in the first quarter and a £7.5 billion downward revision of Britain’s budget deficit for the 2009-10 fiscal year.

Two leading investment banks, JP Morgan and Goldman Sachs, predicted that Britain will grow 3% or more next year.

Improving economic news has taken a back seat in recent weeks as fears of defaults by Greece and other eurozone economies gave way to worries that austerity measures would hit growth in Europe and the global economy. “The market

How much insurance coverage does the FDIC provide?

The standard maximum deposit insurance amount is described as the “SMDIA” in FDIC regulations. The SMDIA is $250,000 per depositor, per insured bank, through December 31, 2013. On January 1, 2014, the SMDIA is scheduled to return to $100,000 per depositor, per insured bank, for all account ownership categories except Certain Retirement Accounts, which will remain at $250,000 permanently per depositor, per insured bank. 1.

The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For instance, if a person has a checking account at Bank A and has a checking account at Bank B, both accounts would be insured separately up to the SMDIA. Funds deposited in separate branches of the same insured bank are not separately insured.

The FDIC provides separate insurance coverage for funds depositors may have in different categories of legal ownership. The FDIC refers to these different categories as “ownership categories.” This means that a bank customer who has multiple deposits may qualify for more than $250,000 in insurance coverage if the customer’s accounts are deposited in different ownership categories and the requirements for each ownership category are met.

http://www.fdic.gov/deposit/deposits/insured/basics.html

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