FDIC Insurance Fund - It Doesn't Actually Exist

by mtippett | September 17, 2008 at 03:58 pm

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Wow, this was news to me.

When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering.
We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction.

I have a feeling we'll all walk away from this meltdown a whole lot more educated about the intricacies of the financial system. Let's just hope it's not too late.

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