Posted on 03/01/2009 8:51:32 PM PST by an amused spectator
Facing a cascade of bank failures depleting the deposit insurance fund, federal regulators on Friday raised the fees paid by U.S. financial institutions and levied a hefty emergency premium in a bid to collect $27 billion this year.
The Federal Deposit Insurance Corp. now expects that bank failures will cost the insurance fund around $65 billion through 2013, up from an earlier estimate of $40 billion. The bank failures, 16 already this year following 25 last year, reflect the ravages of rising unemployment and falling home prices that have sent loan defaults soaring.
The industry's biggest trade group said the new insurance fees would place an extra burden on the nation's banks and thrifts, and suggested regulators could reduce the premiums if their economic assumptions end up being overly severe.
The FDIC board said the economic crisis, which has caused the insurance fund to drop to its lowest level in nearly a quarter-century, also warranted extending the plan to rebuild the insurance fund from five years to seven.
"We're taking steps today to ensure that the deposit insurance system remains sound," FDIC Chairman Sheila Bair said at a board meeting to vote on the changes. "These steps are necessary because banks — and not taxpayers — are expected to fund the system."
(Excerpt) Read more at abcnews.go.com ...
I'm sure the banks will NEVER pass the costs on to their customers - mostly us taxpayers...
Looks like the heaping helpings of STOOPID that kids have been getting in the skools over the last 30 years are doing the trick! YEAH!
Good grief!!!!
Please make it stop! I can’t take no more of this insanity!
Here’s a crazy idea. In the grand scheme of trillion dollar bailouts, a couple dozen billion is chump change. How about they just pull a few earmarks out of porkus and underwrite the FDIC? I know where I’d start, with every cent going to ACORN.
I got news for them. It will cost much more than 65B between now and 2013 to cover insured losses.
But ACORN would be the last thing cut ... don’t you know how disorganized some communities are? (And which communities are these that are so disorganized?)
I hope the FDIC is better funded than the Pension Benefit Guaranty Corporation (PBGC) has proven to be when retiree’s compamies go bust.
That is another Gov’t Agency that will need a big time bailout.
Yes. Dang, I regret the bit of money I left in the stock market. Stupid oversight on my part.
Obama is the Typhoid Mary of politics!!!
Oh, I have some idea. I mean, it is tough work getting all those illegal aliens registered to vote. Sometimes they actually have to go to the trouble of creating real falsified papers! Imagine! Then some of those illegals as squeamish about registering and doing anything that might get them in trouble and deported. As if the O wouldn't come to the aide of the little people with some rich guy's money. Then of course there's the even more difficult task of working with the legal voters. Heck, some of them even speak English, which makes it harder - they have to put some real thought into which lies to tell them in order to buy ...get... their vote out. :-/
lol
If they say 65B I say, at the least, to double it. History makes that a prudent bet.
This current crisis could even bankrupt the FDIC contingency fund!
Hey Shelia, you're FDIC Chair and yet you flunked Econ 101? How can that be?
Hey sweetie, think about this for a minute. I know these are hard questions, but try, okay? Where do banks and other corporations get their cashflow? And where does the money come from to pay their taxes and FDIC fees?
Obama obviously sucks. BUT does the president appoint the chairman of the FDIC? Isn’t this the Fed’s doing?
So the game plan now is the FDIC seizing other weakened, but still functioning banks that may of had a chance to survive, and selling off their assets to the major banks to shore up their depository reserves, and in exchange, the FDIC receives a lump sum of cash from the seized banks assets to keep its reserves up.
The Wamu seizure was probably the most corrupt move by the FDIC ever. A fully fuctional bank with 150 billion in investment grade deposits was seized by the FDIC, silent auctioned to JPMorgan Chase (who had been trying to takedown Wamu for years) for only a couple billion which will end up being one of the biggest highway robbery deals in financial history. And to complete the deal, the FDIC expected a couple billion in wamus assets in exchange for making this happen.
JPMorgan Chase and the holding company of what used to be Wamu are currently in court still fighting for control of the 4 billion the FDIC wants for itself. That money belongs to the Wamu holding company and its creditors, but the FDIC wants it.
I want to vomit when the CNBC talking heads and Cramer fawn over Sheila Blair and Jamie Dimon, CEO of JPMC, calling them the saviors of wall street. What a load of crap.
If we had privatized depositor’s insurance (where premiums would always be based on market realities and not what some bureaucrat comes up with) we may very well have avoided this problem. But as long as these institutions know they can pass the buck to Fannie Mae, Freddie Mac, the Fed, or whatever other mechanism for foisting off bad decisions onto tax-payers, you shouldn’t expect too much risk aversion.
Yep. And let's not forget State Unemployment Funds in this group.
But, not to worry. The gigantic Ponzi Scheme, where the Treasury issues Debt and the Fed buys it will come to the rescue. Imagine, we are literally lending money to ourselves!
Maddoff would be impressed. The only difference between this and what Maddoff did was that he had to keep getting new investors into the scheme to pay off old one. Our Gov’t just prints the money, via Fed purchases!
Actually, Maddoff is jealous I'm sure.
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