Posted on 03/04/2009 4:50:07 PM PST by Lady GOP
The head of the Federal Deposit Insurance Corp. has warned that the fund insuring Americans' bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.
Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative," Bair wrote in the letter dated Monday to the chief executives of the nation's 8,305 federally insured banks and thrifts.
The industry, especially smaller community banks, has said the new insurance fees will place an extra burden on an already struggling sector. A federal banking regulator said last week the new premiums will unfairly burden smaller banks that didn't contribute to the financial crisis with reckless lending.
As loan defaults have soared, reflecting the ravages of rising unemployment and sliding home prices, bank failures have cascaded and sapped billions out of the fund that insures regular accounts up to $250,000. The fund now stands at its lowest level in nearly a quarter-century, $18.9 billion as of Dec. 31, compared with $52.4 billion at the end of 2007.
The FDIC now expects that bank failures will cost the insurance fund around $65 billion through 2013, up from an earlier estimate of $40 billion. There have been 16 bank collapses already this year, following 25 in 2008 — which included two of the biggest savings and loans, Washington Mutual Inc. and IndyMac Bank.
(Excerpt) Read more at sfgate.com ...
Get in line. Many bailouts ahead of yours.
sure like uderlining and bold text dont cha
“going” is the wrong verb tense....
“GONE” BUST is closer to the truth.
More impressed with the spelling in your comment.
I wonder if this is part of bambi’s budget?
The group that insures pensions will go too - wonder which will be first?
How is that done?
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