On January 14, 2008 the FDIC web site began posting the rules for
reimbursing
depositors in the event of a bank failure. The Federal Deposit Insurance
Cor****ation (FDIC) is required to “determine the total insured amount for
each depositor....as of the day of the failure” and return their money as
quickly as possible is “modernizing its current business
processes and procedures for determining deposit insurance coverage in the
event of a failure of one of the largest insured depository institutions.”
(see http://www.fdic.gov/news/news/financial/2008/fil08002.html#body)
The implication is clear, the FDIC has begun the “death watch” on the many
banks which are currently drowning in their own red ink. The problem for
the
FDIC is that it has never supervised a bank failure which exceeded 175,000
accounts. So the impending financial tsunami is likely to be a
crash-course
in crisis management. Today some of the larger banks have more than 50
million depositors, which will make the FDIC's job nearly impossible.
