Friday, May 22, 2009

Failure Friday

Two more banks shut down today, 2009 total is now at 36. The FDIC also released its new assessment plan. According to my calculations, it will bring a whopping $5.7 billion into the fund. That would cover this week's failures. I am not impressed.

One may ask: won't this assessment plan hurt the banks that are in most need of the insurance? The answer is: of course.

Raising expenses during a crisis is not a great idea. Maybe charging ZERO premiums from 1995 - 2005 wasn't such a good idea either.

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