FDIC Chairman Sheila Bair went on YouTube and posted this video on the FDIC site discussing the health of the agency and the banking system. The video is posted below. There was nothing new about the information she provided. Highlights include:
- # of bank failures were low compared to past banking crisis. 534 failured at the height of the S&L crisis versus 100 today. That may be true, but the magnitude of the failures today are much larger, as pointed out in this article: How Bank Failures in 2008 Compare to Tough Times in 1980's - Updated
- Bank failures are a non-event from a depositors stand-point, as long as their balances are below FDIC limits.
- The FDIC is sound. It had $42 billion in reserves at the end of the quarter and another 4$5 billion is being raised by asking banks to pre-pay for the next three years of fees. The FDIC can also access a $500 billion line from the Treasury if needed.
- The FDIC is a part of the government and is backed by the full faith of the US.
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