IndyMac’s failure has sent ripples through an already battered economy. Considering there is a real threat for other regional banks to fail, it would seem imperative that the government responsibly handle the fallout to limit public outrage and panic. But the FDIC seems unprepared to handle all the failed bank’s customers in a quick and efficient manner (LA Times):
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…many customers have said that when they checked their balances online, tens of thousands of dollars appeared to be missing. And when they went to branches in search of answers, they encountered lines hundreds of people deep and unhelpful staff members. On Tuesday, reports of unruly crowds brought police to branches in Encinom, CA and Northridge, CA, although there were no arrests or injuries….
“My trust in the FDIC is gone,” said Gabay, 49. “The question is now, where do we put our money? Do we buy a bigger mattress?”
Even contemplating the words “bank run” seem a scary thought. But runs don’t always happen for rational reasons and the FDIC ought to be better prepared. IndyMac is only the beginning.
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