Senate Prepares to Loan FDIC $500 billion

Friday, March 6, 2009

Senate Banking Committee is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The move comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner, to rebuild its fund that insures American consumers’ deposits, which have been hard hit by a string of bank failures.

The FDIC’s deposit-insurance fund has fallen precipitously in recent months with 25 bank failures in 2008 and 16 so far in 2009.

This entry was posted in News, Recession, U.S. Economy and tagged , , , . Bookmark the permalink.

3 Responses to Senate Prepares to Loan FDIC $500 billion

  1. Fran says:

    I think they are trying to handle this news every so carefully, to prevent bank runs. There is no way this set up could absorb multiple major bank failures- guaranteeing all those funds. Those in the know say we will be seeing lots more failing banks through 2010.

  2. Woodcliffe says:

    We’ve reached the point where the FDIC insurance fund is at risk.

    This does not bide well for our financial security as a nation. If Americans don’t feel safe depositing money in the bank, then no amount of Federal bailout money will save the banks.

  3. a loan – please – they are staving off a collapse – and watch more bank failures happen over the next 2 years

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