By: Jennifer Chang
After taking over many banks, the FDIC is in the red and may not have enough money to cover the rest of the banks. Insuring each bank deposit up to $100,000 in 8500 banks, the government fund has been keeping a list of banks to watch out for. In 2007, 3 banks failed, and in 2008 the number of banks failed grew to 25. At the beginning of the year, there were 90 banks on the watch list held by the FDIC. That number has grown to 117 banks, which is the highest number in five years.
The FDIC has predicted that the number of bank failures will increase, and it will cost $100 billion in the next four years. In dire need of cash, regulators are now thinking of ways to replenish money quickly. The FDIC chairman has stated that the fund is considering all options including borrowing from the US Treasury. Bank analysts have stated they expect continued bad news about the fund for the next few years. Until the FDIC is out of the red, regulators are going to have to find ways to replenish the fund quickly, especially to cover the expected number of banks that will fail in this coming year.
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