Comments on: Four Banks Seized by Feds This Week; 2009 Failures Already Outstrip 2008 http://allthatnatters.com/2009/04/25/four-banks-seized-by-feds-this-week-2009-failures-already-outstrip-2008/ ... a weblog of current events and constant comment Fri, 23 Jul 2010 00:37:37 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Visconti http://allthatnatters.com/2009/04/25/four-banks-seized-by-feds-this-week-2009-failures-already-outstrip-2008/comment-page-1/#comment-76 Visconti Sun, 26 Apr 2009 20:51:27 +0000 http://allthatnatters.com/?p=872#comment-76 Paul - Quick reply off the top of my head, you can fact check by looking in the newsroom area of the FDIC, but here's what I understand. The FDIC's Deposit Insurance Fund is in fact in trouble. The FDIC administrator, earlier this year, announced that the premiums banks pay to the Deposit Insurance Fund would increase in 2009 because of the heavier than normal drawdowns on the fund. Since the fund is financed through FDIC member institution payments, I don't believe the FDIC will need to be bailed out - unless there are a tremendous number of bank seizures. The FDIC is solvent and I personally would not worry a bit about a dime I have on deposit in an FDIC-insured bank. Paul – Quick reply off the top of my head, you can fact check by looking in the newsroom area of the FDIC, but here’s what I understand. The FDIC’s Deposit Insurance Fund is in fact in trouble. The FDIC administrator, earlier this year, announced that the premiums banks pay to the Deposit Insurance Fund would increase in 2009 because of the heavier than normal drawdowns on the fund. Since the fund is financed through FDIC member institution payments, I don’t believe the FDIC will need to be bailed out – unless there are a tremendous number of bank seizures. The FDIC is solvent and I personally would not worry a bit about a dime I have on deposit in an FDIC-insured bank.

]]> By: Paul Natterly http://allthatnatters.com/2009/04/25/four-banks-seized-by-feds-this-week-2009-failures-already-outstrip-2008/comment-page-1/#comment-74 Paul Natterly Sun, 26 Apr 2009 06:12:36 +0000 http://allthatnatters.com/?p=872#comment-74 According to the FDIC's website, its total funding for "receivership management" (i.e. bailing out banks) is $1 billion for 2009. This article says $656.4 million of that (about 65% of the budgeted funds) was spent just now, on 4 banks. That means 24 others have failed so far this year (no data on how much each of those cost the FDIC), it's only April and the outlook for banks isn't getting better. I have three questions: #1: Will the FDIC have funds to insure retail deposits (bank accounts for you and me) if a bank goes under and a buyer for the bank cannot be found? #2: Is the FDIC still solvent? #3: If not, who bails out the FDIC? According to the FDIC’s website, its total funding for “receivership management” (i.e. bailing out banks) is $1 billion for 2009. This article says $656.4 million of that (about 65% of the budgeted funds) was spent just now, on 4 banks. That means 24 others have failed so far this year (no data on how much each of those cost the FDIC), it’s only April and the outlook for banks isn’t getting better. I have three questions:

#1: Will the FDIC have funds to insure retail deposits (bank accounts for you and me) if a bank goes under and a buyer for the bank cannot be found?
#2: Is the FDIC still solvent?
#3: If not, who bails out the FDIC?

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