A lot of people have invested in banks thinking that their money would be safe. Afterall, the FDIC will protect us right? We always knew that if all the people asked for all their money back, there was no way the FDIC could possibly pay it all back. Due to the current financial crisis, it seems as though this theory is being put to the test.
According to multiple reports, the FDIC is asking for aide to pay off all the investors that lost money due to the current crisis. This time last year the FDIC fund had more than $50 billion dollars in it, however, at the end of this week, the fund will be in the red.
What the FDIC is asking for is that banks prepay for the next three years of fees right now, to help the FDIC cover the banks current loses. The banks really do not have any other alternative. If they do not pay, they risk losing the FDIC insurance which will surely lead to a bank run on most banks which would put them out of business. So its either pay a little now or lose it all eventually. Also, isn't the banks poor manangement of funds what put them in this position in the first place?
If this plan goes through, the FDIC will receive $45 billion dollars in much needed funding. This is the 3rd time this year the FDIC has needed to raise funds to protect consumers.
I like the cartoon in addition to the idea that we should save money for our uncertainties of life. My mother is teaching me that since I was about 12 or 13 years and I do that, I save. By- Anshu Dixit
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