Wednesday, March 4, 2009
FDIC Insolvent?
Think your savings are stowed away nice and safe in your savings account? You may need to rethink how secure you feel. FDIC Chairman, Sheila Bair, has acknowledged that FDIC may be insolvent this year unless they increase fees for banks and/or receive help from the government (bailout). It might be time to start stuffing 10's and 20's under the mattress.
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Perhaps what she didnt mention is that they carry an 80 billion open line of credit with the Treasury. If it came to it, the Treasury could issue bonds and transfer the proceeds to the FDIC. The FDIC is then naturally responsible to pay it back. The good thing is that the FDIC is self funding and, as of yet, have not required any taxpayer money to function.
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