Don’t understand about FDIC
By Daniel at 12 June, 2009, 9:56 pm
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“The Democratic reform plan is likely to empower the Federal Deposit Insurance Corp. with the authority to collect fees and possibly use taxpayer dollars to pay off creditors and counterparties of an insolvent mega-institution” Ronald D. Orol
NO, FDIC is not supposed to use our tax money at all. It is supposed to be funded by collecting insurance premiums.
Besides, why should our tax dollars be used to pay off counterparties or creditors when OUR DEPOSITS are supposed to be paid off first?
This is what I don’t understand. FDIC has $19 billion to guarantee over $4 trillions of deposits. Its DIF ratio was below the mandatory requirement at 0.4%, meaning that for every $100 we deposit we get ONLY $0.4 back.
Sheila Bair used the money she never had to back at least $300 billion in bank bonds via TLGP because after FDIC wiped out Wamu bondholders, the bond market crashed and banks could not longer raise money by selling bonds.
Why should taxpayers have to pay for her mistake? How can one regulator spend so much of our tax dollars without approval from Congress?
She showed absolutely ZERO respect to our deposits and our Congress plans to give her more power?
papa
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