"FDIC looks to banks to replenish deposit fund" by Stephen Labaton, New York Times | September 30, 2009
WASHINGTON - The proposed plan was a partial victory for industry executives and lobbyists....
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But some bank executives expressed concern....
Officials said that the plan disclosed yesterday was less expensive than a direct loan from the banks, an idea that many banks supported, because no interest would have to be paid and the plan would not be voluntary. And it was preferable to a loan from the Treasury, which some lawmakers and industry executives supported, because even though it would be paid back by the industry, such a loan could be seen as yet another taxpayer bailout....
The officials said that if nothing were done, the fund would be holding almost exclusively hard-to-sell real estate and other unmarketable assets by early next year.
AS PLANNED, folks!
At last report, this summer the fund had about $22 billion in cash and other marketable securities. As more banks have collapsed, most of its liquid assets have been exchanged for the less marketable assets seized from the failed institutions, like foreclosed property....
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That is what is in the "insurance" fund?
That would almost certainly wipe out the industry’s earnings for this year - in the first half of the year the industry reported $1.8 billion in income....
The plan proposed by the Federal Deposit Insurance Corp. would, in effect, have the industry lend money to the insurance fund by ordering banks to prepay their annual assessments, which would otherwise have been due through 2012, this year. If adopted, the proposal, the agency’s third restoration plan for the fund in a year, would raise $45 billion from the banks to replenish the fund....
They also announced that the fund, which had more than $50 billion before the crisis began last year, has been so battered by bank collapses that it would fall into deficit this week....
Acknowledging that they had greatly underestimated the problems plaguing the nation’s banks yesterday, federal officials proposed a $45 billion plan financed by the industry to rescue the ailing insurance fund that protects bank depositors....
And WHO do you ULTIMATELY SEE on the HOOK THERE, readers?
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So WHAT are you going to do when the government and bank tell you THE MONEY is GONE and too bad, American?
