The FDIC Tries To Bail Itself Out... Illegally
Former thrift regulator William Black says the FDIC does not have Congressional authority to do this but oh well, they're doing it anyway.
Viva la recovery!
The Federal Deposit Insurance Corp. plans to issue securities backed by about $500 million of home mortgages acquired from failed banks, leaning again on guarantees to help sell the debt.
The FDIC will back about 85 percent of bonds created for the offering and it may not sell the deal’s junior-ranked notes, which will lose principal first amid any defaults on the underlying loans, David Barr, an agency spokesman, said.
“The decision hasn’t been made yet,” he said today in a telephone interview. “We may sell all or a portion of the certificates at some point in the future."
What was that crap about private investment, Timmy? Looks like the FDIC is going to need a lifeline.