Ninety-four banks have failed so far this year. 94 now gone and the pace of bankruptcies have not yet slowed. This, in my mind, gives us a good indication of the true current health of the US economy.
FDIC weighs extraordinary steps, including loans from banks, to shore up insurance fund
WASHINGTON (AP) -- The Federal Deposit Insurance Corp. is weighing several costly -- and never-before-used -- options as it struggles to shore up the dwindling fund that insures bank deposits.
Ninety-four banks have failed so far this year. Hundreds more are expected to fall in coming years largely because of souring loans for commercial real estate.
Bank failures since the financial crisis struck have drained the fund to its lowest level since 1992, at the peak of the savings-and-loan crisis. The fund insures deposit bank accounts of up to $250,000.
"Lots of banks are going to require more capital, and (Bair is) trying to rob from the rich and give to the poor,"
The agency is considering borrowing billions from healthy banks. Alternatively, it may impose a special fee on the banking industry.
Each option carries risk: Drawing money from healthy banks would take dollars out of the private sector, making that money unavailable for investment in the weak economy. But charging the whole industry a fee to replenish the fund could push weaker banks toward failure.
http://finance.yahoo.com/news/FDIC-weighs-extraordinary-apf-3266069115.html?x=0
Saverio Manzo
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