Getridofthemnow

Banks Worried About FDIC Debt Guarantees

The 75bp will not end up applying to Fed Funds. For the rest of the senior unsecured, clearly there should be a fee applied for insurance for the program, so complaining banks shouldn't be taken too seriously. Rather than complaining, how about presenting a solution? Hey, that's a neat idea.

Is the flat 75b is sensible? Well of course its not. It's an arbitrary # that will help Sheila replenish her DIF and plucked out of thin air.

The fee should be risk based, not flat rate. FDIC should base the insurance fee on CAMELS ratings and other safety and soundness indicators.