Tuesday, September 29, 2009

FDIC is Asking for a Bailout

Blooomberg reports that the FDIC, Federal Deposit Insurance Corp., today voted unanimously to have lenders prepay fees through 2012, raising about $45 billion. What a bizarre mechanism. In effect, bake wil be bailout the FDIC out.

"FDIC is seeking to replenish deposit reserves as banks fail at the fastest pace in 17 years,"
"Lenders would prepay FDIC premiums for the fourth quarter and next three years on Dec. 30, to replenish the deposit insurance funds that staff estimated will have a negative balance at the end of this quarter, the agency said. "

The cost of bank failures has been raised to $100 billion through 2013.

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