The FDIC Is in Trouble

08/05/2009 • Safe Haven

As we all know, the Federal Deposit Insurance Corporation (FDIC) guarantees depositors that they'll get their money back if a bank fails, at least up to a certain amount. To fund its operations, the FDIC collects small fees from the banks that are held in reserve for the purpose of taking over troubled banks and paying off depositors. Since the Great Depression, a period marked by widespread runs on banks, the FDIC has done a good job of fulfilling its mandate. So how are they doing in this crisis? In a nutshell, they are in trouble. The FDIC insures 8,246 institutions, with $13.5 trillion in assets. Not all of them are going bankrupt, of course. Yet as of late July, a disturbing 64 banks had gone belly up this year - the most since 1992 - costing the FDIC $12.5 billion. At the end of Q1, the agency was already asking for emergency funding. And worse, much worse, is likely yet to come. The following chart shows the total assets on the books of the FDIC's list of 305 trouble

2 Comments in Response to The FDIC Is in Trouble

Comment by Lucky Red

Entered on: 8/5/2009 8:01:08 PM

The FDIC is in trouble? Well, let's go bail them out...time's a wastin'...

Comment by William1950

Entered on: 8/5/2009 4:02:10 PM

I read a book about the failure of the American economy, in it a man who was walking across the nation asked to buy a cigar from a farmer, the farmed said,"five dollars paper or a nickel coin,"

If you are watching the largest credit card spending in history and if you understand that soon American paper will be as worthless as the German mark was in 1946, you might just pick up a roll or quarters each pay day. After all we do trust in real money more then what the O'man can print.

Casey

middleamerican2010

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