FDIC fund down 20% in second quarter
Another piece of discouraging news hit today as the FDIC (federal deposit insurance company) stated it’s fund fell 20 percent to $10.4 billion in the second quarter as U.S. banks overall lost $3.7 billion.
According to Yahoo News, this is the fund’s lowest point since 1992 which was the height of a previous crisis involving savings and loan associations. Some analysts have gone on to state that the fund could fall below zero by year’s end.
Regardless of how much abysmal news keeps circulating around the FDIC, the fact remains that your deposits are still insured up to $250,000. Even if the FDIC was to go bankrupt by years end, the US treasury would step in to bail out any lost deposits due to bank failure.
In today’s news article featuring this story, the FDIC wanted to reiterate the fact that no depositors should be worried…
Despite the shrinking insurance fund, customers have nothing to worry about. The FDIC is fully backed by the government, which means depositors’ money is guaranteed up to $250,000 per account. The agency also still has billions in loss reserves apart from the insurance fund.
As of now, the FDIC has $21.6 billion in funds available for lost deposits due to bank failures. This figure is down from almost $26 billion last quarter.
August 27th, 2009 at 12:40 pm
The FDIC will be bankrupt in 2010. The US government will be bankrupt in 2020.