Posted on 09/22/2009 7:25:17 AM PDT by SeekAndFind
Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.
Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.
A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.
“It’s a nice irony,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting company. “Like so much of this crisis, this is an issue that involves the least worst options.”
Bankers and their lobbyists like the idea because it is more attractive than the alternatives: yet another across-the-board emergency assessment on them, or tapping an existing $100 billion credit line to the Treasury.
The Federal Deposit Insurance Corporation, which oversees the fund, is said to be reluctant to use its authority to borrow from the Treasury.
Under the law, the F.D.I.C. would not need permission from the Treasury to tap into a credit line of up to $100 billion. But such a step is said to be unpalatable to Sheila C. Bair, the agency chairwoman whose relations with the Treasury secretary, Timothy F. Geithner, have been strained.
“Sheila Bair would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help,” said Camden R. Fine, president of the Independent Community Bankers. “She’d do just about anything before going there.”
(Excerpt) Read more at nytimes.com ...
Government bails out banks, banks bail out the government. Circle of Life, and all that.
Already posted. Yes, I have a badge and I like to use it. LOL
Yeah.. I see no potential for terrifying results here...
I thought banks making loans to unqualified borrowers was the thing that got this whole mess started. Why encourage more of that?
They’re going to run out of sources to borrow money from. What happens then?
What happens when the gummint says ‘Sorry, we’re broke, we can’t pay you back”?
Doofuses.
EDIT TO ADD THE MISSING #2
2) They can always BORROW MONEY from the PUBLIC ( Government Bonds ).
“They’re going to run out of sources to borrow money from. What happens then?”
They confiscate more property from the American taxpayer.
Then, after they destroy private wealth and industry..they print more money. It isn’t going to end well.
Well, I was wondering if we were ever going to have a quadrillion dollar deficit ...
Can the banks start appointing czar’s to oversee the government now?
When silver hits the price of gold before the Fed was created LOOK OUT. That will be about 28 per oz.
More like quintillion...
MIDDLE CLASS MUST NOT FAIL, PART 1
http://www.youtube.com/watch?v=nmgwCmBmyKU
MIDDLE CLASS MUST NOT FAIL, PART 2
http://www.youtube.com/watch?v=n0JLFHQiMs4
Being a former examiner, I wonder if examiners would criticize these loans for being bad credit quality after being compelled to make them???
Audit the Fed. Then disolve it. Get rid of ‘reserve’ banking which has been taxing Europe and England since the 1600s and the US since 1912 via inflation. The Federal Reserve is our 4th central bank. They only work for the bankers and politicians at the expense of the people.
It is all going to hell...
I warned about this on here months ago and some smartass banker types told me I was nuts the FDIC CAN’T EVER go bankrupt.
Our country is [blanked]
Our whole economy is a fraud
Collapse is near
This is a band-aid on an amputation
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