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FDIC Needs Bailout
The existing $30 billion credit line “provides a thin margin of error” to cover losses from bank failures, Bair wrote yesterday in a letter to U.S. Senate Banking Committee Chairman Christopher Dodd. Dodd, a Connecticut Democrat, plans to introduce legislation to raise the borrowing authority to a permanent level of $100 billion and temporarily increase it to $500 billion through Dec. 31, 2010.
The assessment was aimed at rebuilding a fund the FDIC uses to repay customers for deposits of as much as $250,000 when a bank fails. The fund, drained by 25 bank shutdowns last year, fell to $18.9…
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