March 11, 2009

• FDIC Seeks Credit CUZ THEY DIDN’T COLLECT BEFORE

  Bostom Globe:
  

  Now-needy FDIC collected little in premiums
  With fund going strong, banks didn’t pay for decade

  By Michael Kranish
  Globe Staff / March 11, 2009

  WASHINGTON – 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.

  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. [..]

  So basically banks didn’t even have to internalize some small portion of their own bailouts.

  I blame the Republicans. But of course I’m wrong.

  • 7:03 pm
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