FDIC Can Cover About 1% of “Potential Obligations”

July 15th, 2008

This article is a few months old, so it doesn’t take the IndyMac implosion into account.

Via: Forbes:

In the case of bank collapse, the FDIC has to step in to insure the value of deposits. Normally the FDIC attempts to maintain a fund at 1.25% of the value of its potential obligations. In recent months, however, this fund has slid to 1.19%, driven primarily by a rise in deposits, said Sheila Bair, chair of the FDIC. If this figure slides further to 1.15% it forces the FDIC to make moves to shore up the fund.

Bair said the FDIC is monitoring 90 institutions with assets of $26 billion that it has identified as troubled. The entire size of the FDIC reserve fund is $52 billion. As a precaution, the FDIC is running bank failure readiness exercises, she said.

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One Response to “FDIC Can Cover About 1% of “Potential Obligations””

  1. GK says:
    July 15, 2008 at 8:24 pm

    LACF

    http://ktla.trb.com/video/?clipId=2693720&topVideoCatNo=79422&c=79422&autoStart=true&activePane=info&LaunchPageAdTag=homepage&clipFormat=

    (Los Angeles Charlie Foxtrot)

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