Could this be another boondogle?
Am I the only one wondering where all the FDIC money is going to come from as these banks fail?
I know the premise is that the insurance is paid for by the banks that are insured....but from what I've read the large number of bank buyouts and mergers have resulted in less money paid into FDIC. It's complicated and I haven't done more than just read about it enough to know I probably don't "get it".
What insurer is it that covers the accounts in failed banks? Does it track back to AIG?
The Potential Funding Shortfall at the FDIC - Seeking Alpha
That article seems to assume that the Treasury of the US will pick up where FDIC insurance runs out - just how much debt can we create before the system totally crashes?
Am I missing something? Is it possible to keep reassuring the public that "the funds are covered by FDIC if the banks fail"? Who provides this huge amount of protection - and do they have the money to pay these accounts without raiding the Treasury again?
kay
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