End the TAG Program – It Puts Banks and the Economy at Risk

Peter Wallison is correct about NOW is simply NOT the fiscal, financial, or economic time to allow FDIC TAG to abruptly expire and let $1.6 trillion in chips fall where they may. This would put banks and the economy at risk as Dr. Wallison points out and would immediately tranforming risk-free deposits into risk-assets. Not eaxctly what the Nation needs right now given all the tremendous fiscal uncertainty and fragile economic growth. Congress must act on a temporary TAG extension to avoid this financial sector cliff. Franlly, when the Federal Reserve ends its aggressive monetary policy forcing today's negative real interest rates, and the nation's CFO's and State Treasurers again are interested in a rate of return on their cash deposits -- then TAG will fix itself. But today's financial environemnt demands a TAG extension.

"Triumph or Tragedy" we need to re-read what's in it not arbitrarily pass it, I do agree measures need to be reconsidered and possibly extended but only after an audit on an Independent Basis to determine the health of which institutions stand to gain the most.

With Q-E3 an almost certainty and today's manufacturing report some measures may be needed,I think this need's a lot of thought,also keep in mind that we are still struggling to grow leg's a midst one of the biggest haircut's in modern history look, listen and proceed with caution.

ICBA and Community Banks should be fighting to end TAG. After all, just 3.4% of TAG deposits are held by Community Banks, with an average of only 17 accounts per Bank. (source: FDIC, http://www2.fdic.gov/qbp/2012sep/qbp.pdf). Something just does not compute...