Quote:
Originally Posted by Dan40
As I understand the FDIC, it has always had only a small percentage of its liability funded at any time. There has never been a discussion to fully fund it. And I think it is supposed to garner major funding from the liquidated assets of failed banks. Probably another political pipe dream. And back in the saving and loan scandal didn't a major portion of the depositors have to wait until the Resolution Trust liquidated everything before they got their "insured" deposits. Some waited years [at ZERO interest] to get up to $100,000. of the principle back.
Not an insurance policy you would go out and buy on your own. Another example of, "I'm from the Government and I'm here to help you!!!!"  
Dan |
Actually, no one ever had to wait more than a few weeks, as long as they were within the $100,000 limit. Those that had to wait were over the $100,000 limit with some of them still waiting. Even if accrued interest brought the total deposit over $100K, that accrued interest is not paid out until the FDIC is able to sort through assets, sell those asset or get people to pay off those assets (loans). That's why you see $99,000 CD's advertised.
True, the FDIC only maintains a really small portion as a reserve.
garner major funding from the liquidated assets Hopefully, that was never the case - basically, when a bank is closed the FDIC takes over 100% of the 'assets' - assets in the banking world are loans, investments, cash, FF&E, etc. - it's doubtful that the selling of assets will produce a gain, normally that selling activity produces a loss to the FDIC.