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FDIC Insurance Fund Is Broke
The FDIC’s Deposit Insurance Fund is broke.
Hats off to the Zero Hedge blog for spotting a Federal Deposit Insurance Corp. memo to its board of directors showing that the government agency’s DIF will have no money as of tomorrow.
The key line for the FDIC document:
Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative. This reflects, in part, an increase in provisioning for anticipated failures.
The FDIC also indicated in the memo that it expects another $75 billion of bank failures this year and next for a total of $100 billion of losses. That estimate for total losses is up from $70 billion, which the FDIC set last May. That’s why the FDIC is looking for $45 billion from banks now to cover its short-term capital needs.
Here’s the full document:
FDIC Sept29no1
You can also go to the original document here.
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