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from Rolfe Winkler:
Deposit Insurance Fund, UNoffcially
I was heading out for Thanksgiving vacation when FDIC released the quarterly banking profile, so I wasn't able to update an important chart: Total Insured Deposits, Unofficially.....
(ht Stephen Culp)
When the world was falling apart, FDIC increased deposit insurance limits....to $250,000 for individual non-retirement accounts and unlimited for business transaction accounts. But those increases were treated as "temporary" and so left out of FDIC's total.
Since the $250,000 limit was extended to 2013 -- decidedly not "temporary" -- FDIC started collecting that data from its member banks. The data was published for the first time in Q3.
So in Q3, the official figure -- which includes $250k limits -- jumped from $4.8 trillion to $5.3 trillion. Throw in the $761 billion insured by the transaction account guarantee program and you've got a total of $6.1 trillion of insured deposits. Compare to Q3 '08. Back then, before all the emergency measures, the total was $4.5 trillion. So the increases added $1.6 trillion, or 34%, to the total.*
Treasury line of credit should be Bair’s last option
With the FDIC’s staring at an incredibly shrinking deposit insurance fund, it’s no wonder that Sheila Bair is out about talking about the regulators looking at options to replenish it. That includes tapping the $500 billion line of credit the agency has with the U.S. Treasury put in place for a rainy days.
Borrowing from Treasury should be avoided until it’s absolutely necessary since it is likely to give the banking lobby leverage to shirk higher fees now and in the future, as Wrightson ICAP noted in a recent report earlier this month.
from Rolfe Winkler:
For FDIC, a long tunnel and little light
There's good news and bad news in the FDIC's quarterly profile of the banking sector. The good news is that FDIC has more resources than you think to handle the problem banks on its radar. The bad news is that the too-big-to-fail banks aren't on it.
The balance in the FDIC's deposit insurance fund ended the quarter at $10.4 billion -- its lowest since the savings and loan debacle -- but it isn't the only security blanket protecting insured depositors. The agency also has a "contingent loss reserve."
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The Wall
