In an unusual move FDIC Chairman, Sheila C. Bair, has just made a You Tube video to assure bank depositors that FDIC insurance coverage continues to effectively protect their deposits.
She believes that most of America’s 8,200 banks are going to survive the current crisis. The banking crisis of 1989 (when 534 banks closed) was significantly worse. With signs of the economy recovering, America’s banks are also going to recover. The chance of bank failings is now low, and even if failures occur they are a “non-event” for FDIC insured depositors.
With $42 billion available to the FDIC at the end of the second quarter of 2009, they are in a strong position. Their finances are going to be further strengthened by a further $45 billion requested from the banks this year in the form of an advance of three years of FDIC payments. The permanent line of credit accessible via the US Treasury provides additional assurance that the FDIC will stand by its commitments and continue to extend the protection it has granted to insured depositors over the last seventy-five years – no insured depositor has ever lost their insured deposit.
The FDIC Chairman speaks with calmness and authority, but are her words going to be sufficient to answer the public unease she obviously felt a need to address online? The video can be viewed on the FDIC’s site and you can judge for yourself.