It’s not clear that there will be any “handouts” here. And any guarantees that end up having to be paid by the taxpayers (and there might not be any, if all goes as hoped) would not be likely to exceed what the taxpayers would end up paying through other avenues, if the huge financial market disruption that would be caused by the unrescued failure of Bear, actually occurred. When dozens of smaller banks start going under as part of the ripple effect, millions of FDIC-insured account-holders will get their $100,000 from the taxpayer.
I don't believe that's true; FDIC payouts come from insurance premiums paid by the banks hosting the insured accounts.
Also, it's more common (last time I talked to a Bank guy) for the FDIC to lean on another, more solvent bank to buy the insolvent bank and cover the losses itself.
Which is just as well because the FDIC reserves are a very small percentage of the accounts they insure.
Sounds like argument for Hillary/Obama’s Healthcare plan. If we don’t provide everyone Universal Healthcare, the Tax Payers end up paying more. So in long run wage garnishing would actually end up benefitting the Tax Payer.
“When dozens of smaller banks start going under as part of the ripple effect, millions of FDIC-insured account-holders will get their $100,000 from the taxpayer.”
Besides putting in danger the safety of the CDs that millions of us own.