"The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.I hope to hell Treasury Secretary Timothy Geithner is asked about this during his Senate testimony today. Not that I have any confidence in anything he would have to say about it. The insipid indecency of predatory conservatism has destroyed America's financial system and taken the global economy down with it. Currently, President Obama and congressional Democrats are overly timid in addressing the cascade of ruin upon us.
The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized - and that bank failures were so infrequent - that there was no need to collect the premiums for a decade, according to banking officials and analysts.
Now with 25 banks having failed last year, 17 so far this year, and many more expected in the coming months, the FDIC has proposed large new premiums for banks at the very time when many can least afford to pay. The agency collected $3 billion in the fees last year and has proposed collecting up to $27 billion this year, prompting an outcry from some banks that say it will force them to raise consumer fees and curtail lending."
Thursday, March 12, 2009
Can Anyone Spare A Dime For the FDIC?
The Boston Globe reports the following: