Bair Says Insurance Fund Could Be Insolvent This Year

The fund will be insolvent before the end of spring (or the start perhaps). A bank "holiday" is becoming more likely by the day. Please have enough cash in your home to last at least one month. Load up on can goods too, just to be secure-Lou

Bair Says Insurance Fund Could Be Insolvent This Year

March 4 (Bloomberg) -- Federal Deposit Insurance Corp. Chairman Sheila Bair said the fund it uses to protect customer deposits at U.S. banks could dry up amid a surge in bank failures, as she responded to an industry outcry against new fees approved by the agency.

“Without these assessments, the deposit insurance fund could become insolvent this year,” Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the fees, according to a trade group.

“A large number” of bank failures may occur through 2010 because of “rapidly deteriorating economic conditions,” Bair said in the letter. “Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative.”

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