FDIC chair: Deposits in nation's banks are safe

WASHINGTON — The nation's banking system is "absolutely safe" and Americans' insured deposits in banks protected, the head of the Federal Deposit Insurance Corporation said Tuesday.

"Insured deposits are absolutely safe," Sheila Bair, FDIC chairwoman, said in an interview on CBS' "The Early Show." "The banking system as a whole is absolutely safe."

The FDIC insures bank deposits of up to $100,000 and up to $250,000 for funds in retirement accounts such as an IRA.

Bair said that while there will likely be more bank closings _ like that of IndyMac Bank, which last week became the largest regulated thrift to fail _ they won't occur on a large scale and should be put in "appropriate context."

"There are 8,500 banks," Bair said. "This is one."

"We've had five bank closings this year," Bair said. "I won't say that banks don't have challenges right now. They do." But, she noted, "No insured depositor has ever lost a penny of insured deposits throughout the FDIC's 75-year history."

Comments

[Cathexis]

1. After 7 years of egregious government lies, this is where an accumulated lack of credibility rears up to bite them on their collective bums. We're used to lies. We expect lies. As an inversion of the old fable, we hear you assuring us, yet again, there are no wolves -- even as we salve all of the previous bite marks.

2. What else are they going to tell us? Government ALWAYS tells the people there is no crisis because they believe that admitting such would cause a panic, thus such assurances are always worthless.

[Tom95134]

It's called a crisis in confidence. People know that the FDIC stands behind the banks but, that being said, why has there been a rush by depositors to draw their money out of the IndyMac bank after the FDIC took it over?

Face it, People don't have any confidence that the bozos in the Bush administration have any idea of how to fix the mess they have gotten us into. It's almost impossible to do anything to increase confidence because of the way we're pushing $12 billion a month down the Bush rat-hole in Iraq.

[WFV]

Two questions:

Five banks have closed this year (and it's July). What is the record in any single year since the depression?

I wonder just how many accounts that FDIC insurance can handle when the big slide begins?

[windwalker1984]

There are 90 banks currently on the FDIC watch list. If even 1/2 of those went belly up, it could totally drain the FDIC insurance fund. Then what?

[StephenBarry]

Marx was correct, the supersession of Capitalism by Socialism is inevitable. We can not endure these so called "free market" crises continually. The system is on the verge of a massive generalized implosion. Keynesian and fiscal stimulus is useless now. A political hammer is needed to smash Wall Street and its political running dogs. We are already half way there - privatization of gains and socialization of losses. The very WORST of both - the maximization of exploitation of the public. The capitalists are frantically clinging to a sheer cliff face by their bloodied fingernails and could care less about anyone else. The dialectic of this is that after the Soviet Union collapsed they moved closer to Capitalism. When we crash, and we will crash, we will move closer to Communism, as we did under FDR. We will end up meeting in the middle - Socialism. And after all, as Marx pointed out, Socialism is merely the prolonged historical epoch preceding Communism.

[Chavez08]

Keynesianism was a good balance between Socialism and raw Capitalism/Neoliberalism.

What would we expect to replace the system now?

[SgtLucifer]

"FDIC chair: Deposits in nation's banks are safe"

---- If only Ken Lay were alive, he would sue the FDIC chair for plagiarism.

[StephenBarry]

Idiotic statement.

[Wiredwilly]

The Nations Banks are Absolutely Safe = Bullshit.
How can banks be safe when the currency is backed by hot air ?
Thomas Jefferson was no one's fool. He absolutely opposed a Central Bank .
Think about it :
Thomas Jefferson was AGAINST a Central Bank
George W. Bush is FOR a Central Bank.
Now, think, who would you rather have for President , Thomas Jefferson or George W. Bush

[SgtLucifer]

George W Bush

[Wiredwilly]

Well, you've got him. Good luck.

[themodernleader]

This is a repeat of 1929, except much more dangerous. The FDIC would not have to issue this statement if the banks were anywhere as safe as they are alleged to be. Our Country's banking system and economy has been managed by a truly home-grown criminal class.

[LiarLiarIraqsOnFire]

I can just hear it 6 months from noqw - Sheila Bair, FDIC chairwoman says, "No one could have forseen the collapse of the U.S. Banking Industry."

EXPERTS AGREE, EVERYTHING IS FINE!!!

[Vinca]

It is a scary time, but I guess most people will LEAVE THEIR MONEY IN THE BANK,IN my opinion , and many others, GW BUSH HATES SS AND UNIONS< MAYBE OUR COUNTRY NEEDS SOME PRAYERS

[Gary47]

Well of course they are dufus. They've got all the money. Hello! Debt, schmebt, they'll just use is as a write off and buy up gobs of depressed properties. Then make a fortune in a couple years when the market rebounds. Ignore the whining - it's just posturing.

[Totto]

"As Safe As Houses"

[ReasonIsMyReligion]

Only one in 8500. Could never happen again. Conditions are getting better. Stay the course.

[LiarLiarIraqsOnFire]

ReasonIsMyReligion you forgot - Experts agree: Everything is fine.

[peterg76]

The deposits may be insured, but the US dollar is not.

[ErnestineBass]

Yep. By the time those IndyMac depositors get their FDIC payout, the value of the dollar will have fallen, what...another 10-15%? Oy.

[uncleentropy]

We need a fresh, new war to stop all this whining. Lets set up a conscription office right by the banks since we know that is where everyone will be running to.

We feel bad about the money and all....and we tire of printing it for working people....but we have a way for you to sort of get your money back and unleash your frustrations at those who are holding your oil hostage under the sands of the Middle East.

[HeIsTheOne]

Mr. Gold Standard Alan Greenspan says:

"When banks loan money to finance productive and profitable endeavors, the loans are paid off rapidly and bank credit continues to be generally available. But when the business ventures financed by bank credit are less profitable and slow to pay off, bankers soon find that their loans outstanding are excessive relative to their gold reserves, and they begin to curtail new lending, usually by charging higher interest rates. This tends to restrict the financing of new ventures and requires the existing borrowers to improve their profitability before they can obtain credit for further expansion. Thus, under the gold standard, a free banking system stands as the protector of an economy's stability and balanced growth."

Grab your "Atlas Shrugged" and run for your lives!