A few days ago, I pointed out that the FDIC is quickly going broke, and that the size of the hits to the FDIC’s insurance fund keep getting larger.
Today, The FDIC announced that banks will need to hand over $45 billion to the FDIC in the form of a “prepayment” of their deposit insurance premiums for the next three years.
Says the FDIC:
“The staff of the Federal Deposit Insurance Corp. said it expects expenses tied to failed banks to surge to $100 billion over five years — up 43% from the agency’s last estimate in May.”
Notably, the headline reads that the FDIC “asks banks for help.” How polite of them. What happens if a bank refuses to “help?”
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It makes no difference how this is wrapped up, at the end of the day the costs will be passed on to the taxpayer.
BB
“What happens if a bank refuses to ‘help?’”
What does happen? I was under the impression that participation in the FDIC was voluntary. All the banks I’ve ever been to proudly declare that they are FDIC insured. Surely there would be no need to advertise if they were forced to participate? Can’t banks just opt out?
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