The FDIC Is Going to Have to Figure Out Where to Get Some Cash From and Quick
Here's the bottom line for the uninitiated: the FDIC is broke because it didn't collect "insurance premiums" for 10 years and now has to figure out where it's going to get the cash to cover all these pesky bank failures.
Down with moral hazard, let's take down the FDIC already. It has failed in its duty and is now useless. Let the bank consumer do their own due diligence and if they are too stupid to figure out which banks are over-leveraged and which are not, Darwinism declares they deserve to lose everything.
Oh, hope you didn't think JDA was the sympathetic type?
The Federal Deposit Insurance Corp. is weighing several costly - and never-before-used - options as it struggles to shore up the dwindling fund that insures bank deposits.
The agency is considering borrowing billions from healthy banks. Alternatively, it may impose a special fee on the banking industry.
Each option carries risk: Drawing money from healthy banks would take dollars out of the private sector, making that money unavailable for investment in the weak economy. But charging the whole industry a fee to replenish the fund could push weaker banks toward failure.
A third option - borrowing from the Treasury - is politically unpalatable, since it would resemble another taxpayer-financed bailout.
A fourth option would be to have banks pay their regular insurance premiums early. But this idea wouldn't solve the fund's long-term cash needs.
Why not call Zimbabwe Ben and ask for a pay day loan, Sheila? Word on the street is that he's got an itchy printing press finger.
Whatever you come up with, Care Bair, we'll be here covering the carnage as it happens via Bank Fail Friday - and thanks for the material, girl!
Hey what was that website Gary Coleman was pitching? Maybe try that. Just trying to help, SB!