Thursday, October 01, 2009

FDIC Says Bank Insurance Deposit Fund Balance is Negative!

Previous readers of this blog will note that Remixx World! has been covering the FDIC failed bank issue for a few months now. This site predicted back in August, 2009 in FDIC is Officially Out of Money (Insurance Fund Has Negative Balance of $5.5 Billion)! that the FDIC insurance fund had a negative balance. I had a few people tell me that I was crazy and that my numbers made no sense.

Well, the FDIC is now admitting what Remixx World! disclosed. In a recent FDIC memo, the FDIC says that the fund is negative as of September 30, 2009. Actually, it should have said that the FDIC insurance fund was negative as of the Colonial Bank failing on August 14, 2009, and the FDIC had to charge an emergency $5.6 billion fee to stay afloat.

Pursuant to these requirements, staff estimates that both the Fund balance and the reserve ratio as of September 30, 2009, will be negative. This reflects, in part, an increase in provisioning for anticipated failures. In contrast, cash and marketable securities available to resolve failed institutions remain positive.

You can read the rest of the FDIC memo by clicking HERE or checking the embedded document below.

FDIC Sept29no1

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