Litigation

Bair Says FDIC Fund Could Dry Up Amid Surge In Bank Failures

By John Darer

With all the hubbub about insurance companies, let us not forget the banks.

The breadth of the financial crisis has hit reality when Federal Deposit Insurance Corp. Chairman Sheila Bair said in a March 2, 2009 letter to the banking industry that the fund FDIC uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency. Essentially solvent banks get assessed a fee to help offset the cost of insolvent banks.

The unanswered question in any situation like this is would an assessment on a sufficiently large enough insolvent institution be the catalyst the breaks the back of otherwise solvent financial institutions?

Full post as published by Structured Settlements 4Real on March 05, 2009 (boomark / email).