Keep a close eye on where you bank...... WASHINGTON (AFP) – The US government is warning banks that its deposit insurance fund could go broke this year as [COLOR=#000000 ! important]bank[COLOR=#000000 ! important] failures[/COLOR][/COLOR] mount. The head of the Federal Deposit Insurance Corporation, Sheila Bair, in a letter to bank chief executives dated March 2, defended the [COLOR=#000000 ! important]FDIC's[/COLOR] plan to raise fees on banks and assess an emergency fee to shore up the fund and maintain investor confidence. [COLOR=#000000 ! important]Bair[/COLOR] acknowledged the new fees, announced Friday, would put additional pressure on banks at time of [COLOR=#000000 ! important]financial[COLOR=#000000 ! important] crisis[/COLOR][/COLOR] and a deepening recession, but insisted they were critical to keep the insurance fund solvent and protect. "Without these assessments, the [COLOR=#000000 ! important]deposit[COLOR=#000000 ! important] insurance[/COLOR][COLOR=#000000 ! important] fund[/COLOR][/COLOR] could become insolvent this year," Bair wrote. The FDIC chief said in the letter that the rapidly deteriorating [COLOR=#000000 ! important]economic[COLOR=#000000 ! important] conditions[/COLOR][/COLOR] raised the prospects of "a large number" of bank failures through 2010. "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," she wrote. The FDIC last Friday announced it would impose a temporary emergency fee on lenders and raise its regular assessments to shore up the rapidly depleting deposit insurance fund that insures individual customer deposits up to 250,000 dollars. A week ago the FDIC reported a sharp depletion of the deposit insurance fund in the fourth quarter due to actual and anticipated bank failures, to 19 billion dollars from 34.6 billion in the third quarter. The FDIC said it had set aside an additional 22 billion dollars for estimated losses on failures anticipated in 2009.
The FDIC cash reserve is going broke. But they're backed by the government So if they run out of reserves then they will use tax money to cover the failures.
Looks like they are asking for a loan from the treasury department to keep insuring money at the banks.
So much for faith and confidence in our government. Yet they want to take over health care. What's next Social Security.
