According to an official with the Federal Deposit Insurance Corp., bank failures in the United States will cost the deposit insurance fund more than $40 billion over the next four years. It appears that the FDIC’s estimate last fall of $40 billion in losses through 2013 most likely will be surpassed. FDIC Chief Operating Officer John Bovenzi told a House of Representatives hearing that Congress should more than triple the agency’s line of credit with the Treasury Department to $100 billion from the current $30 billion. He says such an increase would ensure “that the public has no confusion or doubt about the government’s commitment to insured depositors.” While this is a tremendous increase in the FDIC’s line of credit, it may well be needed.
Source: Associated Press
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