Monday, February 02, 2009

FDIC seeks to Increase Treasury Borrowing Limit

by Bill McBride on 2/02/2009 09:10:00 PM

This should come as no surprise ...

From Reuters: FDIC seeks to triple Treasury Dept borrowing power

The Federal Deposit Insurance Corp is seeking to more than triple its credit line with the U.S. Treasury Department to $100 billion ... The FDIC and Congress are working to boost the agency's current $30 billion borrowing power ...

The move comes as the FDIC's deposit insurance fund has shrunk due to a significant uptick in bank failures over the past year. The insurance fund's value dropped 24 percent in the 2008 third quarter to $34.6 billion.
...
"They have no immediate need for it, but they just want to make sure they're not constrained in the decision by a lack of the insurance fund," [U.S. Rep. Barney Frank, chairman of the House Financial Services Committee] told reporters ...
"No immediate need". Famous last words.