FDIC Bracing for Bank Failures

padthaiforlunch · 02-26-2008, 12:01 AM

From the Wall Street Journal:

The Federal Deposit Insurance Corp. is taking steps to brace for an increase in failed financial institutions as the nation's housing and credit markets continue to worsen.

FDIC spokesman Andrew Gray said the agency was looking to bulk up "for preparedness purposes." ...

The agency, which insures accounts at more than 8,000 financial institutions, is also seeking to hire an outside firm that would help manage mortgages and other assets at insolvent banks, according to a newspaper advertisement.
...
"Regulators are bracing for well over 100 bank failures in the next 12 to 24 months, with concentrations in Rust Belt states like Michigan and Ohio, and the states that are suffering severe housing-market problems like California, Florida, and Georgia," said Jaret Seiberg, Washington policy analyst for financial-services firm Stanford Group.

TXINSURANCE · 02-26-2008, 01:00 AM

Just out of curiosity has anyone lost money in a U.S. bank since the depression?

djs · 02-26-2008, 01:06 AM

Originally Posted by TXINSURANCE

Just out of curiosity has anyone lost money in a U.S. bank since the depression?

Yes, my daughter lost several hundred dollars last year in overdraft fees, atm charges, etc. I guess she has to learn to balance her check book

Dan

Mr. Bill · 02-26-2008, 05:23 AM

If you consider the S&L crisis, yes, absolutely.

Today you can walk into a Citi bank, sit down with a Smith Barney rep, and lose all your money. The other banks are following suit. You hear the reps calling CD holders and trying to get them into annuities...

Since it just happened to Northern Bank in England this shouldn't surprise any American that steps are being taken...

TXINSURANCE · 02-26-2008, 12:31 PM

I guess I was referring to someone having over the low $100,000 insurable amount from the FDIC - i.e. someone has $300k in the bank and the bank fails, has anyone lost money in this situation since the depression?

Mr. Bill · 02-26-2008, 12:51 PM

Not to my knowledge, in other words, the FDIC has never been "used". Most banks have been sold off, bought by bigger banks. The most recent 'crisis' was ETradeBank, seems that was staved off.