FDIC doesn’t have even a quarter of the funds necessary to cover the losses if 1/3 banks go under. It would still be a buve hit.
“FDIC doesn’t have even a quarter of the funds necessary to cover the losses if 1/3 banks go under. It would still be a buve hit.”
The Fed has the ability to keep the FDIC liquid if there was a collapse big enough to wipe out their funds. But it shouldn’t get to that point, the Fed will be acting as the lender of last resort to keep banks under pressure from failing. This is what they neglected to do from 1930-33 and I think that is the one lesson burned into their institutional memory.