Zarathustra
09-19-2008, 05:26 AM
http://business.theage.com.au/business/no-bank-is-safe-in-this-alarming-atmosphere-20080917-4inu.html
No bank is safe in this alarming atmosphere
BE very, very careful. There are reports the US Federal Deposits Insurance Commission is running out of money. Chairman Sheila Blair has been forced to issue a statement. "US banks are overwhelmingly safe and sound and the Government fund used to cover insured deposits will be adequate to absorb any losses, even high losses," she says.
But Brian Bethune, US economist at consulting company Global Insight, said: "Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC's insurance fund."
Christopher Whalen, senior vice-president and managing director of Institutional Risk Analytics, said: "We've got a … retail bank run forming in this country."
On Monday, US Treasury Secretary Henry Paulson said the nation's commercial banking system "is safe and sound", and that "the American people can be very, very confident about their accounts in our banking system".
FDIC officials say 98% of US banks still meet regulators' standards for adequate capital.
Associated Press reported that the FDIC was down to $US45.2 billion ($A57 billion) - the lowest level since 2003.
Whalen then wrote that reports the FDIC was running out of cash had no basis.
His statement said: "It is essential that people realise the US Treasury will advance whatever cash is needed by FDIC to address bank failures and make good the deposit insurance guarantee. There is no issue regarding the bank insurance fund, but unfortunately most of the public do not understand this. The FDIC needs to make this clear in all of its public statements."
IRA has been constantly in contact with the FDIC and other regulators and knows more about this situation, I would suggest, than the US Government....
No bank is safe in this alarming atmosphere
BE very, very careful. There are reports the US Federal Deposits Insurance Commission is running out of money. Chairman Sheila Blair has been forced to issue a statement. "US banks are overwhelmingly safe and sound and the Government fund used to cover insured deposits will be adequate to absorb any losses, even high losses," she says.
But Brian Bethune, US economist at consulting company Global Insight, said: "Additional failures of large banks or savings and loans companies seem likely, and that could overwhelm the FDIC's insurance fund."
Christopher Whalen, senior vice-president and managing director of Institutional Risk Analytics, said: "We've got a … retail bank run forming in this country."
On Monday, US Treasury Secretary Henry Paulson said the nation's commercial banking system "is safe and sound", and that "the American people can be very, very confident about their accounts in our banking system".
FDIC officials say 98% of US banks still meet regulators' standards for adequate capital.
Associated Press reported that the FDIC was down to $US45.2 billion ($A57 billion) - the lowest level since 2003.
Whalen then wrote that reports the FDIC was running out of cash had no basis.
His statement said: "It is essential that people realise the US Treasury will advance whatever cash is needed by FDIC to address bank failures and make good the deposit insurance guarantee. There is no issue regarding the bank insurance fund, but unfortunately most of the public do not understand this. The FDIC needs to make this clear in all of its public statements."
IRA has been constantly in contact with the FDIC and other regulators and knows more about this situation, I would suggest, than the US Government....