[C210N]

FDIC will ALWAYS FOREVER and EVER cover the funds in our banking accounts!

... up until the day that it does not. and from that point in time, it will never cover those "funds".

[Diogenesis]

It is all a scam already.

In the USA, the FED has kept rates ~ 0%, which has
led to a 5% loss per year in all deposited accounts.

Over 3 years, this has been a 15% loss due to the
governments failure to give a normal budget
as the Congress has destroyed the fabric of America
(for themselves and al Qaeda).

[DManA]

I’d be interested to hear how the class of people that own the Cypriot banks are “suffering”. Let’s have a story about the suffering of the upper managerial class whose decisions drove their companies into the toilet. Suffering?

Have any of these incompetent managers even been fired?

What fraction of the owners and managers personal wealth did they keep in their own banks? I’m guessing they are a LOT smarter when dealing with their own wealth than they are with OPM.

[sickoflibs]

RE :”The Cypriot Parliament shot down the plan, though a smaller hit to depositors — many of whom are wealthy foreigners — was still in the offing late last week. Yet the tempest in the eastern Mediterranean is a reminder that depositors, in fact, are also creditors of banks and are potentially at risk.”

Wealthy foreigners who wont be saving there anymore.
Raiding your own state's bank accounts sure sounds suicidal.
Its stuff like this that allows the US to continue to run up debts with low interest rates.

[SampleMan]

When/if U.S. banks have a mass failure the FDIC will act in a totally political manner.

1. There isn’t enough money to cover the losses.

2. The FDIC will hold off on paying and finally come up with a scheme that smells like Cyprus:
a. Cover 100% the first $1000
b. 75% up to $5000
c. 50% up to $50,000
d. 25% up to $100,000
e. 0% over $100,000

[Wuli]

I believe banks SHOULD be required to OFFER the option of having an “insured” savings account, and they, the banks and their customers (through what banks shave off the savings rate to pay for the insurance) should buy the private insurance for them.

Private insurers, with their own skin in the game, will demand to look at the segregation of the accounts, the leverage of the accounts and where the money from the accounts is invested, adjusting the inurance rates they will charge a bank in accordance with the risks they believe the bank is taking against the accounts covered by the insurers policy. Low and behold - banks would no longer invest the deposits from their customers insured savings accounts in risky things like sub-prime mortgages or “deriviatives” based on sup-prime mortgages.

That would also greatly increase the rates that sub-prime mortgages would have to obtain, to find lenders for them, which would vastly reduce their offerings in the mortgage market, helping to reduce how much of the mortgage market such mortgages would be able to reach.