Тред №84259

ЦитатаOnce the FDIC runs out of funds, it will have to borrow from the fed (fed prints money and FDIC borrows it). That means the checks being send out by the FDIC will soon be funded by printed cash. The important points to note from these two articles are:

1) Three banks failed Friday.

2) The failures are expected to cost the FDIC's deposit insurance fund close to $350 million.

3) For the first time in nearly five years, the FDIC was unable to find an acquirer for a failed bank, which is an ominous sign for regulators

4) 6 banks have failed in 2009, and 31 have failed since the start of the credit crisis.

Conclusion: The FDIC was a bad idea:

1) FDIC insurance has created a false sense of security. Right now, millions of Americans believe their checking and saving accounts are safe. They don’t realize that if there are widespread bank failures, even if they get their dollars back, those dollars won’t be worth much anymore because of all the money the government will have to print.

2) FDIC insurance encourages risk taking by banks. Today, bankers aren’t concerned about the moral consequences of their actions in the way they would be without the FDIC. Even if a banker drives his bank into the ground, he doesn’t need to worry about the deposit of his friends and family, because they are guaranteed. In other words, the FDIC has freed bankers from the worry of losing their depositor’s life savings, allowing them to freely concentrate on profit motives (ie: creating wonderful inventions like subprime CDOs squared)

4) FDIC insurance distorts interest rates by allowing failing institutions to survive to long. For example, banks that get into serious trouble can raise interest rates on their CD deposits, instead of failing like they normally should. The investors flock to these high yielding CD knowing that they are fully insured by the FDIC, and this allows insolvent banks to stay afloat. Meanwhile, healthy banks have to pay higher interests rates on their deposits,

While it is true that FDIC insurance provides stability and peace of mind during the good times, it also creates systematic risks which are a root cause of today’s once in a generation financial collapse.

The FDIC, in its present form, is a hugely destabilizing factor. Consider that many brokerage firms were offering their richest clients last year to spread their millions of dollars out among hundreds of the country's riskiest (highest yielding CD) small banks around the country (so everything was under 100,000 insured limit). This flow of cash into America's sickest institutions was/is terrible for the economy. Bad banks should fail, not suck up all the deposits from healthy banks.
Two changes need to be made to FDIC for it to be viable:
1) Make it the insured limit higher and per taxpayer (ie: taxpayer gets his first
2) Make interest bearing accounts insured minus 1 years interest. (ie: 97% of a saving account yielding 3% would be insured)
These two changes would change the behavior of America's richest: healthy banks will get deposits and bad banks will fail.