Are FDIC troubled Banks being rescued by the government?
“Already, FDIC Chairman Sheila Bair has emerged as a central player in the unfolding crisis. So far this year she has overseen the rescue of 14 U.S. financial institutions, including Wachovia and Washington Mutual Inc. Now, the Senate version of the rescue bill approved Wednesday would augment the FDIC’s role. It would more than double, to $250,000, the size of bank accounts the FDIC insures and would give it unlimited authority to borrow from the Treasury over the next year.” In July, for instance, the agency took over IndyMac Bank, based in Pasadena, Calif., a big issuer of risky mortgages with $32 billion in assets. It is operating the bank under a conservatorship, powers not used since the FDIC seized Superior Bank of Chicago in 2001. The FDIC estimated it will lose between $4 billion and $8 billion covering insured IndyMac deposits. Since then, experts said, the agency has quietly become more aggressive, stepping in earlier to avoid such losses.
