With bank failures on the rise and the possible collapse of Washington Mutual looming in the distance, some people are worrying that the FDIC doesn’t have the capital to do its job. Namely, protecting people from losing money they’ve got in the bank.
Well, worry not, jittery folks, the FDIC is just fine—according to the FDIC.
Reuters: U.S. banks are overwhelmingly safe and sound and the government fund used to cover insured deposits will be adequate to absorb any losses, even high losses, Federal Deposit Insurance Corp Chairman Sheila Bair said on Tuesday.
“Banks overwhelmingly are strong. They’re safe and sound,” Bair said during an appearance on Bloomberg Television. “A lot of this turmoil is occurring outside of insured depositary institutions. I think that cannot be overemphasized.”
…”We are in continual analysis and stress testing and monitoring of our own exposures,” Bair said. “I am confident that our industry-funded reserves are going to be adequate to absorb any losses we might have to take, even in high loss scenarios.”
The FDIC’s Deposit Insurance Fund fell 14 per cent in the second quarter to $45.2 billion due to the failure of IndyMac Bancorp Inc in July and other bank failures. The fund is used to insure up to $100,000 per deposit and $250,000 per individual retirement account at insured banks.
See Also: Are Your Bank Deposits Safe? Not Exactly
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