FDIC Insurance Fund - It Doesn't Actually ExistSubmitted by Fabio on Mon, 09/15/2008 - 11:41
Hi from Germany,
I don`t know if this is known among Paulites. I was pretty surprised to read that:
"When FDIC head Shelia Bair says her agency might have to bolster the FDIC's insurance fund with Treasury borrowings to pay for the new spate of bank failures, a lot of us, this 40-year banking veteran included, assumed there's an actual FDIC fund in need of bolstering.
We were wrong. As a former FDIC chairman, Bill Isaac, points out here, the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like..."