The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday. [...]If banks would have to pay a higher premium to help out the FDIC, you can bet your bippy those higher premiums will be passed directly to the account holders (i.e. us). Guess we can call that one a taxpayer bailout as well.
FDIC Chairman Sheila Bair has not ruled out the possibility of going to the Treasury for a short-term loan at some point. But she has said she does not expect the FDIC to take the more drastic action of using a separate $30 billion credit line with Treasury — something that has never been done.
The FDIC's fund is currently below the minimum set by Congress in a 2006 law. The failure of IndyMac Bank in July cost $8.9 billion.
Next month, Bair plans to propose increasing the premiums paid by banks and thrifts to replenish the fund.
And throughout all this, poor Dana Perino has to actually get up on a podium and tell everyone that the economy is a "mixed picture." Ah, the art of nuance. Praise FSM that we have so many words in our language to choose from for the sake of softening the blow.
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