Agency that insures bank deposits may need help

[Heidi]

Source: AP

(AP) – 1 hour ago

NEW YORK — The coffers of the Federal Deposit Insurance Corp. have been so depleted by the epidemic of collapsing financial institutions that analysts warn it could sink into the red by the end of this year.

That has happened only once before — during the savings-and-loan crisis of the early 1990s, when the FDIC was forced to borrow $15 billion from the Treasury and repay it later with interest. The government agency that guarantees depositors against the loss of their money in a bank failure may need its own lifeline.

The FDIC on Thursday will disclose how much is left in its insurance fund, and update the number of banks on its list of troubled institutions. That number shot up to 305 in the first quarter — the highest since 1994 and up from 252 late last year. FDIC Chairman Sheila Bair may also use the quarterly briefing to discuss how the agency plans to shore up its accounts.

<snip>

None of this means bank customers have anything to worry about. The FDIC is fully backed by the government, which means depositors' accounts are guaranteed up to $250,000 per account. And it still has billions in loss reserves apart from the insurance fund.

Because of the surging bank failures, the FDIC's board voted Wednesday to make it easier for private investors to buy failed financial institutions.


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[truthisfreedom]

1. What a fucking mess.

They're making rushed decisions now that will lead to even more trouble later.

[BR_Parkway]

2. And to the best of my knowledge, nothing has been changed - I've seen

no re-installment of regulations that prevented these problems or new ones enacted.

[zbdent]

3. don't ya kno? Too much regulation stifles businesses!

GOP mantra ...