Tuesday, September 30, 2008

Does The FDIC Suspect A Run On Banks May Be Near?

The Federal Deposit Insurance Corp. is asking Congress for temporary authority to raise the limit on the amount of money it insures for individual bank accounts. Reading between the lines of the statement put out today by FDIC Chairman Sheila Bair, the FDIC clearly fears a run on banks, if FDIC coverage of bank deposits is not increased immediately.

Bair put out a statement late Tuesday afternoon asking that Congress allow her agency to increase the $100,000 limit per account that has been in place since 1980.

"Unfortunately, there is an increasing crisis of confidence that is feeding unnecessary fear in the marketplace," Bair said. "To address this crisis of confidence, I do believe that it would be helpful for the FDIC to have the temporary ability to raise deposit insurance limits."

Bair did not say what she thought the new limit should be. FDIC spokesman Andrew Gray said simply, "We'll leave that to Congress."

-Robert Wenzel

No comments:

Post a Comment