Bair Says Insurance Fund Could Be Insolvent This Year (Is our money safe in banks?)

Not looking so good for people with money in banks?

Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

“Without these assessments, the deposit insurance fund could become insolvent this year.

“A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter. “Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative.”

Consumers should watch this issue closely, said Edmund Mierzwinski, consumer program director at U.S. PIRG, a Boston- based consumer-watchdog group.

“I wouldn’t take their money out of the bank yet,” Mierzwinski said. “If the FDIC is saying that there is this serious problem, then we should all be concerned. I think there is a chance the FDIC is going to have to ask taxpayers for money in the future.Read More

Can we expect the government to come out and warn the Americans with money in the banks in time to get their money out….I would think not!

LINKS:

(1) Boo-freaking-hoo: Million-dollar home owner whines about bailout limits

(2) Congressional Kabuki theater: Why do we let Treasury/Fed/AIG walk all over us?

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2 comments on “Bair Says Insurance Fund Could Be Insolvent This Year (Is our money safe in banks?)

  1. Re the new borrowers bailout, a funny gag headline, from Ace of Spades.

    Obama’s Cramdown “Creates or Preserves” 6600 Points on the Dow

  2. Evidently, the FDIC will get some more walking around money. This is actually the right thing for Congress to do. I just wish the new regime would let some more banks fail. As in the Great Depression, when one of the feds’ few successes was saving the banking system, it is important to put the zombies out of their misery so that people will trust the surviving institutions.

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