Posted on 02/27/2009 6:05:32 AM PST by rabscuttle385
The federal insurance fund that protects most bank deposits is being drained by a sharp rise in bank failures and has dwindled to its lowest level since 1993, the Federal Deposit Insurance Corp. reported yesterday.
Depositors are not at risk because the fund is backed by the government, but taxpayers could be forced to reach into their wallets if the decline continues.
When a bank fails, the FDIC pays up to $250,000 to each account-holder to replace whatever money does not remain in the vaults. The fund is replenished by assessments on banks, but over the last year, much more money left than arrived. And the pace of bank failures continues to increase.
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.
The FDIC's board is scheduled to vote this morning on increasing the quarterly assessment that banks must pay. The board also could vote to impose a one-time special assessment to replenish the fund more quickly. FDIC officials declined to say yesterday how large an increase was likely.
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.
(Excerpt) Read more at washingtonpost.com ...
Now there is a very strange one or two second delay. I must wait to see what my keyboard registered. Ran my anti-virus programs without any effect. This is beyond weird. Like gremlins are interfering.
Strange things are going on here on FR.
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