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Which Depositors Should Suffer Losses When a Bank Fails?

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Comments (7)
Couldn't agree with you more. Reduce the moral hazard (FDIC protection - taxpayer protection) and you would have reduced the cost of the banking crisis. Its always easier to play with (ahem - risk) other peoples money.
VERIBANC, Inc.
Michael M. Heller, President
Posted by veribanc | Thursday, February 07 2013 at 2:55PM ET
FDIC Insurance premimums in the USA is paid by the Financial institutions who hold insured deposits. ultimately the cost of this insurance is paid by the depositors in these institutions. Perhaps Europe should try this model.
Posted by dameon | Thursday, February 07 2013 at 3:59PM ET
FDIC Insurance premimums in the USA is paid by the Financial institutions who hold insured deposits. ultimately the cost of this insurance is paid by the depositors in these institutions. Perhaps Europe should try this model.
Posted by dameon | Thursday, February 07 2013 at 3:59PM ET
FDIC insurance premiums didn't cover the cost of the most recent bank bailout by taxpayers of approx. $700 Billion. The FDIC's fund reached a high of approx. $53 Billion in the first quarter of 2008, which was inadequate for this crisis. $180 Billion in taxpayer dollars bailed us out of the S&L crisis according to the GAO. So how much will taxpayers be on the hook for when the next crisis hits? Which is why bank boards and bank execs, bank investors, and depositors should have more skin in the game not less as manifested every time FDIC coverage is increased.

VERIBANC, Inc.
Michael M. Heller, President
Posted by veribanc | Thursday, February 07 2013 at 4:55PM ET
Alex, why not eliminate deposit insurance and just have banks offer money market accounts invested only in Treasury securities?
Posted by kvillani | Thursday, February 07 2013 at 5:18PM ET
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