2008-10-18 — wallstreetexaminer.com
... the FDIC is temporarily guaranteeing all interbank credits for 30 days, starting past Monday. After the promotion expires in early November (just after elections, he-he), the banks will receive the new price-list for FDIC insurance coverage. And this insurance will be finally graded depending on the bank’ strength. The cost of this insurance for troubled banks will be dire. That’s when those troubled banks will publicly recognize that they simply cannot afford the FDIC coverage anymore and we’ll see the second wave of failures (the first wave we’ve just enjoyed).
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tvsterling at 19:26 2008-10-19 said:
Interesting essay. From a reform standpoint I think a graduated FDIC insurance fee schedule is a good idea. A drunken driver pays more & more for car insurance the worse he gets. Eventually he loses his liscence. Where I live you see people like this from time to time riding their bicycles around town. Is there that much difference between a drunken driver & a drunken banker? Probably will be a great tool for keeping banks on the straight & narrow. Will such a reform cause more banks to fail? Who knows? There are some indications that smaller banks are run more conservatively than big ones. I think the smaller banks might just do OK. Permalinkadd a comment | go to forum thread
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