Wednesday, August 27, 2008

FDIC Increases Loss Estimate for IndyMac

by Bill McBride on 8/27/2008 09:40:00 AM

From Reuters: FDIC says IndyMac failure costlier than expected

The Federal Deposit Insurance Corp said on Tuesday it now expects IndyMac's failure in July to cost its insurance fund $8.9 billion, compared with the previous expected range of $4 billion to $8 billion.
...
Diane Ellis, the FDIC's associate director of financial-risk management, said IndyMac's expected hit to the fund blossomed because analysts have had more time to value IndyMac's assets and have assigned some higher loss rates.

Also, some deposits that the FDIC originally thought were uninsured are actually insured, Ellis said.
This is quite an increase in the expected loss.