2009-09-22 — freedomblogging.com
" The Federal Deposit Insurance Corp.’s Inspector General released a report today on the regulator’s handling of failed IndyMac Bank, which specialized in stated-income loans to folks with decent credit scores."
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tvsterling at 20:40 2009-09-22 said:
The fox isn't guarding the henhouse; THE FOX IS LOOSE IN THE HENHOUSE. If we can at least get the fox back out of the henhouse & chained to a good stout post there may be hope. We paid FDIC & OTS to do this to the country. Permalinkronin at 00:39 2009-09-23 said:
The FDIC was not the primary regulator of IndyMac, and would have touched off open Washington warfare by leaning too hard on OTS to jump out of Indy's lap and at least bite it on the ankle. If we had a system in which there was one banking regulator (don't forget that Indy switched its charter to get the benefit of OTS supervision) and one deposit insurer (yes, FDIC) we might have had a better outcome. Imagine if FDIC could examine banks for soundness and set rates for deposit insurance based on risk. If avoiding high premiums didn't appeal to a bank, they could go without FDIC insurance, but would need to make it plain to customers that their deposits are "not insured and may lose value" just like they do for securities. Would you put a large chunk of change into such a bank? Do you think that brokered deposits would flock in - or out? The market would keep risky lending to a minimum by restricting the amount of deposit money available to fund it. On the other hand, sound institutions could pay more for deposits, since they would be charged a lower premium by FDIC, making more money available for sound lending. Permalinkadd a comment | go to forum thread
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