FDIC Bailout Up Next

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By Gene Cappa (about the author) Page 1 of 1 page(s)

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For OpEdNews: Gene Cappa - Writer

Federal Deposit Insurance Corporation, with $45.2 billion on hand as of June 30, will fall far short of the $200 billion or more needed to pay claims by the end of 2009.

AMERICANS have gotten used to the idea that bank failures were as rare as a category five hurricane. No banks went bust in 2005 or 2006. Seven collapsed in 2007 as the credit crisis began to exact a toll. So far in 2008, 12 more, with total assets of $42 billion, have fallen -- that's the worst wave of bank failures since 1992.

INDY MAC, which had $32 billion in assets when it went into receivership, is the most expensive bank failure the FDIC has ever covered. And that record may not stand for long.

BY THE END OF 2009, about 100 U.S. banks with collective assets of more than $800 billion will fail, predicts Christopher Whalen, managing director of Institutional Risk Analytics, a Torrance, California-based firm that sells its analysis of FDIC data to investors.

IT WON'T TAKE MANY MORE FAILURES before the FDIC itself runs out of money. The agency had $45.2 billion in its coffers as of June 30, far short of the $200 billion Whalen says it will need to pay claims by the end of next year. The U.S. Treasury will almost certainly come to the rescue, "FDIC May Need $150 Billion Bailout as Local Bank Failures Mount", by David Evans, Bloomberg News, Link, CLICK HERE http://www.truthout.org/092508A#1

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