Source:
New York Times...
When banks were flush, most of them paid nothing for a golden government guarantee. Bank failures were so rare that, for a decade, the Federal Deposit Insurance Corporation waived most of the premiums it normally would have collected to insure bank deposits.But now the government plans to raise the amount of deposit insurance that consumers have, leaving the F.D.I.C. — and potentially taxpayers — in a bind.
After forgoing premiums from 1996 to 2006, the agency must now turn to struggling banks and ask them to pay more, putting more pressure on the industry. If a large number of banks fail, the F.D.I.C. may have to turn to the Treasury for more money, forcing taxpayers to foot the bill.
“It’s unfortunate that we didn’t have more time to build up the fund in the good times,” said Sheila C. Bair, the F.D.I.C. chairwoman, in an interview Wednesday. “It is what is, and we are dealing with the situation.”
Read more:
http://www.nytimes.com/2008/10/02/business/02deposit.html?_r=1&oref=slogin
"Unfortunate"? :eyes:
Here's our heads up on the next big bail out.