Business

Banks need another help
by kristina leskova

FDIC – Federal Deposit Insurance Corporation is a United States government corporation created after the Great Depression in 1933. Its aim is deposit insurance and FDIC guarantees the safety of deposits in member banks. During the year 2008 twenty-five American banks became insolvent and were taken over by the FDIC. Nowadays FDIC is trying to find the best option how to shore up decreasing fund. There are several options but each of them carries some risk. First option is to borrow money from healthy banks. But if we take money from healthy banks it would mean taking dollars from the private sector and this would cause no investment. Because without money it is not p! ossible to invest it. However during this recession it is very important to invest and improve the current status of economy. Second option is that every bank would have to pay some special fee. This option has also some disadvantage – there are also weaker banks which have problems to survive and this fee could lead them to failure. And the banks already paid some fee this year. Another fee could lead to bankrupt of many weak banks. Third option is borrowing from the Treasury, but Treasury Secretary Timothy Geithner wants to stop government assistance quite quickly. Fourth option would be that banks would pay regular insurance, but this would not solve the need of long term cash. So as you can see any of the four options is the right one, it is all about finding the least bad option. There will be a meeting on next week and there will be said the final solution.

related story (sgx15431): http://news.yahoo.com/s/ap/20090922/ap_on_bi_ge/us_banks_fdi...

by kristina leskova for PocketNews (http://pocketnews.tv)

PocketNews is a new real-time news broadcaster delivering the latest and hottest news right to your pocket ! With global clients who want to be kept up to date, PocketNews is everyone's way of keeping in touch with the World.

posted by Blog TechSource @ 2:14 PM