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Friday, November 6, 2009
12:20 PM TweetThis
  • A new rule that caps the interest rates paid to depositors by banks deemed "not well capitalized" will likely accelerate the rate of bank failures. The cap - 0.75% above the U.S. average - is meant to prevent weaker banks from driving up costs for the rest of the industry.
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This news story has 5 comments:

  •  
    We know this doesn't end well, but if you can cap banker's pay you can cap interest rates and then you can cap...
    Nov 06 12:23 PM | Link | Reply
  •  
    The best way for a struggling bank to lure in new depositors and beef up its cash reserves is to make sure they are restricted as to the rates they can offer to new customers, whether they are competitive with other banks makes no difference, the Fed government believes it "should rain where it is already wet"!
    Nov 06 12:39 PM | Link | Reply
  •  
    Hey, they can cap how many gallons of water your toilet uses each flush, so why stop anywhere? Next, there'll be a limit on the number of times you can go each day, and if you exceed it, you'll pay a surtax.


    On Nov 06 12:23 PM Tony Petroski wrote:

    > We know this doesn't end well, but if you can cap banker's pay you
    > can cap interest rates and then you can cap...
    Nov 06 12:40 PM | Link | Reply
  •  
    FDIC should call this the GMAC rule. GMAC (Ally Bank) had been offering exorbitant interest rates at the taxpayer expense in order to gain market share. The FDIC forced them to lower rates.

    This is a good rule. If my taxpayer dollars are going to the FDIC, I don't want them to allow banks engaging in reckless practices to drive up costs, which will make even more banks fail, and hence, drive up taxpayer costs even more. The banks doing this are mostly the poorly managed banks that are on the brink of bankruptcy.
    Nov 06 12:45 PM | Link | Reply
  •  
    Thank You. A voice of reason and proportion.


    On Nov 06 12:45 PM H.J. Huneycutt wrote:

    > FDIC should call this the GMAC rule. GMAC (Ally Bank) had been offering
    > exorbitant interest rates at the taxpayer expense in order to gain
    > market share. The FDIC forced them to lower rates.
    >
    > This is a good rule. If my taxpayer dollars are going to the FDIC,
    > I don't want them to allow banks engaging in reckless practices to
    > drive up costs, which will make even more banks fail, and hence,
    > drive up taxpayer costs even more. The banks doing this are mostly
    > the poorly managed banks that are on the brink of bankruptcy.
    Nov 06 12:49 PM | Link | Reply
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