All Entries Tagged With: "deposit insurance corporation"

Jumping Off the Drowning Ship

Safety Valves in Case of Bank Failures :- A Brief History of Deposit Insurance :- The financial crisis of the 1920’s piling up upon the failure of the banking system called for a mechanism to safeguard the deposits of the people in event of a calamity. To cater for this fear Federal Deposit Insurance (FDI) was established which covered all the deposits of its member banks. Though initially its antagonists feared this might result in further risky banking practices as the banks would know their blunders would be covered by the government, in actually till the 80’s this system proved to be a good decision until the savings and loan crisis called S&L crisis hit the market in 80’s resulting in bankruptcy of major banks and holding companies. This called for the government to...

When Bank Failure Strikes

Following the observation that the figure of bank failures rise up to 140 in 2009, there was a slight comfort in observing the total merely reach four annually. The sense of relief fades away upon the realization that 2010 is here now. The consequences of the 2008 global recession are still in the economies of the world, since merely during the first week of January three small banks in Utah, Illinois and Minnesota severely suffer the crisis’ aftermath. The anticipation that the 2009 economic trend still endures, the takeover of the Federal Deposit Insurance Corporation (FDIC) on several banks adhere to the much bigger Horizon Bank closure which is located in Bellingham, Washington. For instance, St. Stephen State Bank in St. Stephen, Minnesota had approximately $24.7 million assets and...