FDIC Seeks 2.5 Billion from Bank Execs

[Norwayguy]

F.D.I.C. Seeks $2.5 Billion From Executives of Failed Banks - NYTimes.com

The agency, which had to contend with 157 bank failures last year, may sue bank directors and officers for what it considers gross or simple negligence.
Two bank suits, naming 15 people, have already been filed, the agency said, along with four authorized for fidelity bond and attorney malpractice, and 190 concerning residential malpractice and mortgage fraud.
The F.D.I.C. guarantees individual deposits of up to $250,000, but when a bank fails, the agency’s insurance fund takes a hit, and lawsuits against negligent bank officers are one way it seeks to recover money.

I'm always amazed at how few people realize that banks fail all the time...Yes the accounts are insured by FDIC so the clients don't lose any money however it feeds the perception that banks are by and large safer than Insurance Companies.

 

[scagnt83]

F.D.I.C. Seeks $2.5 Billion From Executives of Failed Banks - NYTimes.com


I'm always amazed at how few people realize that banks fail all the time...Yes the accounts are insured by FDIC so the clients don't lose any money however it feeds the perception that banks are by and large safer than Insurance Companies.

Well, the insurance companies are mostly barred from telling customers in advertising about State Guarantee Funds.... so how is the public supposed to know otherwise???

 

[COInsguy]

Well, the insurance companies are mostly barred from telling customers in advertising about State Guarantee Funds.... so how is the public supposed to know otherwise???

The ironic part is that banks, have very little actual capital on hand for deposits as it is all out on loan (see house of cards in dictionary lol) and they can preach FDIC all over the bank, yet insurers, who are required to be ridiculously capitalized compared to banks cannot mention this and is against the law.

Uncle sam doesn't want you knowing your CD could be growing tax deferred safer than in your bank at a better rate of return......

 

[JAngelson79]

The ironic part is that banks, have very little actual capital on hand for deposits as it is all out on loan (see house of cards in dictionary lol) and they can preach FDIC all over the bank, yet insurers, who are required to be ridiculously capitalized compared to banks cannot mention this and is against the law.

Uncle sam doesn't want you knowing your CD could be growing tax deferred safer than in your bank at a better rate of return......

It's funny...most people don't know that for every dollar on deposit in their bank, that same banks lends out 7...8....9 or 10 or more dollars....leverage eh? How long before it all comes crashing down?

 

[Norwayguy]

It's funny...most people don't know that for every dollar on deposit in their bank, that same banks lends out 7...8....9 or 10 or more dollars....leverage eh? How long before it all comes crashing down?

Yes and they don't know that when you put $1 into an annuity the company may be required to have $1.03 in reserve.

And the banks will point out day in and day out what about AIG they are an insurance company...completely missing the fact that the reason the government was willing to step in was the soundness of the insurance side of things.

 

[somarco]

Yes, the FDIC is in trouble, as is PBGC, Social Security, Medicare, FNMA . . .

You might think the government has trouble managing money.

 

[Norwayguy]

Yes, the FDIC is in trouble, as is PBGC, Social Security, Medicare, FNMA . . .

You might think the government has trouble managing money.

Ya Think!? But until the day comes when these agencies don't pay out the sheeple will follow what the government allows to be promoted.