The FDIC charter:
The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation’s financial system. The FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships.
It would be safer for all if the FDIC sticks to what it does best and doesn't take on additional risk outside its mandate as a favor to irresponsible businesses.
The FDIC isn't letting the bank fail. Quite the opposite. The FDIC stepped in and stopped the bank from failing. Otherwise, the bank's deposits would have been completely wiped out the other day.
And the FDIC can afford to do that because there are laws dictating liquidity requirements to banks and disclosure requirements to inspect and enforce those rules.
Is it not? Most of the time the FDIC will find a buyer and guarantee some percentage (usually ~80%) of all losses to the purchasing bank (plus the very low upfront purchase price, of course) in exchange for them honoring all deposits. So ensuring most deposited funds are safe, at least in the long term, seems to be in line with their usual playbook, even if the unusual circumstances around this particular failure might make that less likely.
FDIC protects against bank failures (like the bank goes bankrupts and looses all the deposited money). It has nothing to do with unauthorized transactions as far as I know.
The FDIC is backed by the full faith and credit of the US government. If a bank fails, your insured deposits will be made while, usually the next business day.
FDIC is backed by the full faith and credit of the US government. This makes the holdings of the fund itself irrelevant -- if BofA fails, Congress will make the depositors whole with Treasuries.
reply