Thread: FDIC says it doesn’t need to borrow, for now

FDIC says it doesn’t need to borrow, for now

Updated 45 minutes ago

WASHINGTON - The agency that guarantees bank deposits in the United States said Thursday it has no immediate plans to borrow money from the government to bolster its insurance fund, which has shrunk under the weight of collapsing banks.

The fund fell 20 percent to $10.4 billion in the second quarter as U.S. banks overall lost $3.7 billion, the Federal Deposit Insurance Corp. said. That is the fund’s lowest point since 1992 at the height of a crisis involving savings and loan associations. Some analysts have warned that the fund could fall below zero by year’s end.

The FDIC estimates bank failures will cost the fund around $70 billion through 2013. It has slipped to 0.22 percent of insured deposits, below a congressionally mandated minimum of 1.15 percent.

Asked about a possibility of tapping the Treasury, FDIC Chairwoman Sheila Bair said: “Not at this point in time. I never say ‘never,’ but not at this point in time, no.â€

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That has happened only once before, during the savings and loan crisis of the early 1990s, when the FDIC had to borrow $15 billion from the Treasury and repay it later with interest.

It's nice to know that if the FDIC needs funds they borrow them and REPAY LATER WITH INTEREST.