FDIC May Borrow Money from Treasury
27 Aug 2008: Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures.
The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank.
Bottom line: After the recent Indymac failure, only $45 Billion of FDIC capital remain - to back over $4 TRILLION in insured banking deposits. Just the failure of ONE LARGE institution (i.e. Washington Mutual, etc) could wipe out the FDIC... We're so screwed!