Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Hot on Facebook

Uproar After NC State Agent 'Fixes' Girl's Lunch Preschooler has to eat chicken nuggets instead of mom's meal »

FDIC May Borrow Billions From Banks

Tapped-out deposit insurance fund mulls reverse bailout

By Jason Farago, Newser Staff

Posted Sep 22, 2009 6:37 AM CDT

(Newser) – After a year of government bailing out the banks, now the banks may bail out the government. Regulators are considering a plan for the FDIC, which protects bank depositors, to borrow billions from healthy banks, enabling the fund to refresh its accounts after a wave of bank failures. Banks and their lobbyists are strongly in favor; writes the New York Times. They'd rather loan the cash than get tapped for up to $10 billion in special assessments.

"Borrowing from healthy banks, instead of the Treasury, has the advantage of keeping this in the family," said an exec with a bankers' trade group. Another appeal of a bank-backed loan: Sheila Bair, the head of the FDIC, has a famously antagonistic relationship with Tim Geithner and is loath to ask the Treasury for help. "She would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help," one banker joked.

Former IndyMac depositors, many who lost their savings, demonstrate on the one-year anniversary of the Federal Deposit Insurance Corp. (FDIC) takeover of the IndyMac Bank in Irvine, Calf. (AP Photo/Nick Ut)

FDIC Chairman Sheila Bair talks to the press at the Federal Deposit Insurance Corp. headquarters in Washington last month. (AP Photo/Gerald Herbert)

FDIC Chairwoman Sheila Bair reviews her notes on Capitol Hill. (AP Photo/Haraz N. Ghanbari, file)

« Prev« Prev | Next »Next » Slideshow

To report an error on this story, notify our editors.

More Newser Stories

Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

(NEWSER) - Bank failures were down significantly in 2011, but that doesn't mean banks are getting healthier—it just means sick ones are taking longer to die, the Wall Street Journal finds. Some 92 banks failed last year, down from 157 in 2010. But many of 2011's casualties were in weaker shape than the banks that failed in 2010. There are still 844 banks on regulators' problem-bank list, and analysts expect many more undercapitalized banks to fail over the next two years. More»

Geithner to Europe: We're Not Lecturing

Treasury secretary in Poland to offer advice on debt crisis

(NEWSER) - As Europe continues to battle its debt crisis, Timothy Geithner has a suggestion. The Treasury secretary today called on euro zone officials to leverage the region’s roughly $600 billion bailout fund, an insider tells Reuters . Geithner didn’t provide details on how Europe should go about the move, nor did he point to the US TALF fund, created in 2008 to back lenders; some have suggested TALF could be a model for Europe’s bailout fund. Geithner conceded, however, that the US is "not in a particularly strong position to provide advice to all of you," notes AP . "We still have our challenges in the United States," he said, and "our politics are terrible... maybe worse than they are in many parts of Europe." More»

Sheila Bair to Leave FDIC in July

Chair weathered financial crisis, oversaw closure of 350-plus banks

(AP) - Sheila Bair is stepping down as chairman of the Federal Deposit Insurance Corp. this summer, ending a five-year term in which she helped craft the government's response to the 2008 financial crisis. The FDIC says Bair will leave her post as one of the government's top bank regulators on July 8. More»

FDIC Seizes 6 Banks, for Total of 34 This Year

But the pace is down from last year

(NEWSER) - The pace is slowing, but bank failures continue to ripple throughout the industry. The FDIC seized six yesterday, the most in a single day this year, reports AP . That makes a total of 34 in 2011, compared to 50 at this point last year. The new banks seized were in Alabama, Georgia, Minnesota, and Mississippi, with the biggest by far Birmingham's Superior Bank ($3 billion in assets and about 70 branches), notes the Wall Street Journal . More»

FDIC Launches 50 Criminal Inquiries of Failed Banks

But it won't name names yet

(NEWSER) - The FDIC has launched criminal investigations targeting around 50 executives, directors, and employees from banks that failed during the financial crisis. Regulators won’t say which banks or executives are under investigation yet, but did tell the Wall Street Journal that banks of all sizes from across the country are involved, suspected of recklessness, fraud, and other criminal behavior. More»

NEWS FROM OUR PARTNERS

What is Newser?

Face it: there's too much news. At Newser, we choose the most thought-provoking and entertaining stories from hundreds of US and international sources and reduce them to a headline, picture, and two paragraphs. And we do it 24/7—you can come back morning, noon, night (and in between) for something new that matters. Read less, know more.

Learn more »

Partnering with: Slate

View Newser on the mobile website

FDIC May Borrow Billions From Banks

Tapped-out deposit insurance fund mulls reverse bailout

OTHER STORIES ON OUR RADAR

bank • FDIC • bailout • bank failure • deposit insurance • Sheila Bair • Timothy Geithner

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

Geithner to Europe: We're Not Lecturing

Treasury secretary in Poland to offer advice on debt crisis

Sheila Bair to Leave FDIC in July

Chair weathered financial crisis, oversaw closure of 350-plus banks

FDIC Seizes 6 Banks, for Total of 34 This Year

But the pace is down from last year

FDIC Launches 50 Criminal Inquiries of Failed Banks

But it won't name names yet

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?

FDIC May Borrow Billions From Banks

Tapped-out deposit insurance fund mulls reverse bailout

Bookmark & Share

OTHER STORIES ON OUR RADAR

bank • FDIC • bailout • bank failure • deposit insurance • Sheila Bair • Timothy Geithner

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Bank Failures Far From Over

Failures down in 2011, but weak banks are taking longer to recover or die

Geithner to Europe: We're Not Lecturing

Treasury secretary in Poland to offer advice on debt crisis

Sheila Bair to Leave FDIC in July

Chair weathered financial crisis, oversaw closure of 350-plus banks

FDIC Seizes 6 Banks, for Total of 34 This Year

But the pace is down from last year

FDIC Launches 50 Criminal Inquiries of Failed Banks

But it won't name names yet

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?