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“A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter. “Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative
The BIS said European and British banks have relied on an “unstable” source of funding, borrowing in their local currencies to finance “long positions in US dollars”. Much of this has to be rolled over in short-term debt markets.
In response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” in which “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”
Originally posted by de9571
"At the end of January, 2009, excess reserve balances at the Fed stood at $793 billion[174] but less than two weeks later on February 11, total reserve balances had fallen to $603 billion.[175]"
Originally posted by dolphinfan
I just can't see the government letting the FDIC fail. They will simply print more money. They'll massively drive up inflation, but they will keep it whole.
Originally posted by de9571
however the cautious non trusting part of me, says, what if, after all the bailouts we have done, it just doesn't work, and it all fails?
I guess this could be a new thread topic, but what if it really did fail, what then?
Originally posted by Mercenary2007
I'll have to find it again, But the laws that govern the FDIC says they can take up to 99 years to make good on their promise to cover your money.
Originally posted by redhatty
reply to post by dolphinfan
Do you realize that if the .gov backstops FDIC it will cause an INSTANTANEOUS bond market dislocation?
No more China buying our treasuries, no more debt financing.
It will cause the collapse of the .gov
And I promise you, what will come next you won't want
Originally posted by Rockpuck
No it wont.. we wouldn't be the first to do it either.. Ireland for example now insures directly through their federal government insurance on ALL deposits (not just a measly 100-250k)
Backstopping or simply filling the reserves of the FDIC would show to light the severity of our situation, but would be considered one of the few "smart" moves by the Government.