The FDIC is getting creative. The insurance fund that makes sure you don't lose money on insured bank deposits has suffered in the past year, and they want to whip it back into shape.
More bank failures are sure to come as economic weakness continues to strain banks, so doing nothing is not an option.
Most proposed fixes focus on charging banks higher premiums or special assessments to build up the insurance fund. This is seen as unfair by some banks - as responsible banks pay extra for problems caused by bad banks - and it can even push some banks towards the brink of failure. Another alternative is to borrow from the US Treasury, which might spark renewed criticism of banks and bailouts.
The newest idea is to have banks lend money to the FDIC. The idea is that healthy banks can profit from their strength - not subsidize unhealthy banks. Taxpayers won't officialy pony up the funds, but nobody's forgetting that the FDIC is backed by the government. We're still on the hook if the plan doesn't work.
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