FDIC chair: Deposits in nation's banks are safe

[endarkenment]

Source: AP

WASHINGTON (AP) — The nation's banking system is "absolutely safe" and Americans' insured deposits in banks protected, the head of the Federal Deposit Insurance Corporation said Tuesday.

"Insured deposits are absolutely safe," Sheila Bair, FDIC chairwoman, said in an interview on CBS' "The Early Show." "The banking system as a whole is absolutely safe."

The FDIC insures bank deposits of up to $100,000 and up to $250,000 for funds in retirement accounts such as an IRA.



Read more: http://ap.google.com/article/ALeqM5isXXOSaDeAuQlGJ9qe5NGSy95LzgD91U95VG0

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Does it need to be said? When the FDIC has to publicly state that the nation's banks are safe, that means that they aren't.

[fascisthunter]

1. "Does it need to be said?"

that was exactly my reaction.

[groovedaddy]

2. Needs to be said to prevent a run on the banks

I worked for a bank back in 87. On "black tuesday" when the market dropped, many folks came to the bank, withdrew funds and placed them in a safe depost box. There is definately a "fear factor" involved, but this "everything's fine" shit isn't being bought by a lot of people (nor should it be).
The deregulation/privatization movement is now coming to its logical conclusion and the big boys are scrambling to keep a severly compromised economy afloat.

[fascisthunter]

5. Oh I Know it's to Thwart Panic

Things are that bad that they need to issue this statement.

[Renew Deal]

9. If I had over 100K in an account, I'd be at thebank.

We all know that $100K deposits are safe (for now). Anyone that has more than that in a single account is looking for trouble,

[NC_Nurse]

3. Where's Jimmy Stewart when you need him? Oh, right, he's dead.

Just like our economy seems to be.

[Tempest]

4. Your deposits are safe

Up to $100,000, after that you're on your own.

[groovedaddy]

6. Hey now, they're giving the Indy Mac depositors 50 cents on the dollar

Is this a great country or what?!!!

[Tiberius]

7. I don't believe that is correct...

I think anyone who has up to $100,000 gets 100%.

Anyone who has more than $100,000 gets 50% of whatever is over $100,000. i.e. if you have $300,000, you'd get $200,000 back (your original $100,000 + 50% of the next $100,000).

Then later they say they "try" to make ALL depositors whole. I think they have a pretty good track record of it; of course all bets are out the window if a lot of banks fail at once.

[groovedaddy]

8. You're right - it's 50 cents on the dollar for anything over $100 K. n.t

[Justitia]

11. let's be clear - the 50% over $100k is an advanced dividend, not the total they may receive.

I just want to clear that up a bit to tamp down on panic.

My husband (a bank auditor / examiner) was one of those gov folks in the 80s who was the last to leave after shutting down failed S & L s post oil bust.

Deposits are insured per account holder up to $100k (i.e., joint accounts insured to $200k).
Any amt over that is considered uninsured and the FDIC will pay an "advance dividend" of 50% of the remainder within days of making a claim.

IOWs, if the bank failed on Monday, and you had 200k in there as an individual acct, you'd get your first 100k as soon as you wanted it, you'd file a claim at the same time for the other 100k and get 50k of that before the end of the week as an advanced dividend. Then, as the bank is held in receivership and the assets are sold, you will get your deposits paid back in proportion to assets sold. That is not to say that you would receive the entirety of the remaining 50k, and not immediately, but with some notable exceptions, it usually gets pretty close.

You can find a list of all banks that have failed since 2000 and see pymts to depositors and percentage of assets sold to deposit liabilities on the FDIC website. There are about 20 banks on there in that time frame I believe.

edit to add link: http://www4.fdic.gov/DIVWEB/index.asp

[Paula Sims]

13. It's generally 100k per SSN per bank

Yes, there are nuances that might insure for more, but to be safe, just keep under 100k in different banks (like our parents used to do). Otherwise the stress isn't worth it. And yes, I know someone that's a bank examiner now and was one back in the 1980's and he just shakes his head. I would keep my money in a mattress but I don't want to risk fire damage.

[Renew Deal]

10. People should be charged 50% for keeping over $100K in an account.

That's a brain dead thing to do.

[Xenotime]

12. Famous last words until the bank just disappears

[Megahurtz]

14. Riiiight.

:eyes:

[truthisfreedom]

15. Lookie here: As of March 31, the fund was $52.843 billion and insured deposits were $4.431 trillion

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20080715/BUSINESS/80715020

Q: How much money does the FDIC have?

A: The FDIC has nearly $53 billion in insurance funds. Beyond that figure, Bovenzi said the FDIC would have go to other banks to raise more money, adding that in such a case, consumers could expect to see some of that amount passed on to them in the form of higher fees.

The current estimated loss to the FDIC resulting from IndyMac's failure is between $4 billion and $8 billion.

Q: How big does FDIC like to keep its deposit insurance fund?

A: The FDIC board of directors has set a Designated Reserve Ratio of 1.25 percent. That means their "target" balance for the fund is 1.25 percent of estimated insured deposits. As of March 31, the fund was $52.843 billion and insured deposits were $4.431 trillion, which resulted in a reserve ratio of 1.19 percent, 0.06 percentage point below the Board's target. If the fund falls below 1.15 percent of estimated insured deposits, the FDIC is required by law to adopt a restoration plan that will bring the reserve ratio back to 1.15 percent within five years.