FDIC expecting BIG BANK FAILURES??
WASHINGTON -- The country's largest banks, particularly those more likely to fail, will have to make changes to the way they treat deposits, as federal banking regulators prepare for more trouble in the struggling banking industry.
The Federal Deposit Insurance Corp., led by Chairman Sheila Bair, on Thursday issued new rules requiring around 160 of the largest banks -- those with at least $2 billion in domestic deposits and either $20 billion in assets or 250,000 deposits accounts -- to adopt new procedures allowing banking regulators to settle existing accounts in the event of a bank failure.
The FDIC said the rules for big banks, which take effect Aug. 18, will "mitigate the spillover effects of a failure, such as risks to the payments system, problems stemming from depositor illiquidity and a substantial reduction in credit availability."
The new rules for large banks will require them to standardize the information they provide to the FDIC on deposit accounts, and to put in systems to automatically post possible holds on very large deposit accounts.
My CAPS friends, if you aren't worried by now, you better damn well be very very soon. Putting "holds" on deposits. This is the United States of America. What the hell is a "large" deposit?
How serious is our banking crisis if these are the kinds of measures the FDIC is being forced to take? Holding deposits. What is next? Limiting travel or the transfer of money. Are we going to be told how much money we can withdraw from the bank per visit?
The journey begins with the first step. Banks are failing. It is obvious the FDIC is worried about more failures. And BIG failures at that. Clearly our government officials are worried. They keep parading around telling us how great everything is and now starting to impose potentially draconian measures.
Our Government only prevents naked short selling on certain banks and defacto is encouraging the behavior for those not on the "protected" list. Something is going on....the question is what? Just how many banks does our Government expect to fail? Exactly what plans are being devised behind the scenes to deal with it?
Get ready, August 18th is not that far away.
Putting holds on deposits? You gotta be kidding me!!!!!!