When IndyMac went under, the FDIC payed every depositor up to $100,000 and 50% of deposits over the insured amount. They will have a claim for the remaining 50% from any assets left over, if any, after liquidation of IndyMac.
In the two bank failures in Nevada, WaMu, and Wachovia, no depositor lost a cent. The buyers made good on all deposits, insured and uninsured.
The point is that our deposit insurance and protection extends beyond the statutory limit, which has just been raised to $250,000.
amcz, when deposit insurance was begun in 1933, the insurance limit was $2500.
Adjusted for inflation, that would be $39,645 in 2007 dollars.
Congress sets the insurance limit, not the FDIC.
Not one cent of depositor money under the insured limit has been lost. If you've got more cash than the insurance limit, you should simply spread it out among several different banks.
Besides, if an individual has more than $100K in a bank account (other than escrow or small business operating expenses), he's being pretty foolish with his investments.
The downside of the higher insurance limit is the exposure to the FDIC and ultimately the taxpayer, but premiums are charged to banks on both deposits and their risk rating. The higher limit gives greater peace of mind to depositors to prevent bank runs which destroy banks better than nuclear weapons.
5 comments:
Considering we passed the FDIC-law back in the '30s, that $100,000 should probably be a cool million when adjusted for inflation.
(I wonder if someone could sue the FDIC for more money based on this argument...)
Of course what really backs up Norway's deposits is the fact the Norwegians spend within their means
That and the $300+ billion oil fund... those lucky bastards didn't work for their money, too.
You can bump the US up a few notches.
The FDIC insurance limit is now $250,000.
When IndyMac went under, the FDIC payed every depositor up to $100,000 and 50% of deposits over the insured amount. They will have a claim for the remaining 50% from any assets left over, if any, after liquidation of IndyMac.
In the two bank failures in Nevada, WaMu, and Wachovia, no depositor lost a cent. The buyers made good on all deposits, insured and uninsured.
The point is that our deposit insurance and protection extends beyond the statutory limit, which has just been raised to $250,000.
amcz, when deposit insurance was begun in 1933, the insurance limit was $2500.
Adjusted for inflation, that would be $39,645 in 2007 dollars.
Congress sets the insurance limit, not the FDIC.
Not one cent of depositor money under the insured limit has been lost. If you've got more cash than the insurance limit, you should simply spread it out among several different banks.
Besides, if an individual has more than $100K in a bank account (other than escrow or small business operating expenses), he's being pretty foolish with his investments.
The downside of the higher insurance limit is the exposure to the FDIC and ultimately the taxpayer, but premiums are charged to banks on both deposits and their risk rating. The higher limit gives greater peace of mind to depositors to prevent bank runs which destroy banks better than nuclear weapons.
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