NEW YORK (Fortune) - The government is bracing for a big bank failure.
A bill introduced in Congress would give the FDIC, the agency that stands behind Americans' bank deposits, temporary authority to borrow as much as $500 billion from the government to shore up the deposit insurance fund.
The bill - the Depositor Protection Act of 2009, backed by Senate Banking Committee Chairman Chris Dodd, D-Conn. and Sen. Mike Crapo, R-Idaho –wouldn't change the status of individual bank accounts, which through the end of this year are insured up to $250,000.
But the Dodd-Crapo bill acknowledges what the financial markets have been signaling for the past month - that the government must take the lead in a costly cleanup of the mess in the financial sector.
Freedom includes freedom to fail.
Hi. Dodd and Frank. The two politicians that got us into this mess so they could spread their idealism. Great....not! Out with these lifelong politicians.
@ Griff & @ Darko
I would say the two of you are dumber than dum, but I think you know that already
Griff, Griff, we got rid of the failure who was in the White House for 8 years. We now have an intelligent individual who's trying to repair all of the damages the failure did to this country.
Griff (You, Dee dee dee),
Bush is out of the office already. I think it was around January.
I agree with Wade about banks being too big. Isn't that sort of like a monopoly when a business gets too big and has such a foothold in the economy? Wouldn't it have been better if these banks and companies failed? What's the worst that couldve happened? People are already losing their homes and jobs, and if a company failed how can they force people out of their homes if the person has a contract to own the house and the company loses it's authority? Would you rather be homeless or jobless? Give Obama a year, then blame him if the country is worst off. Chris Dudd(mispelled intentionally) needs to be castrated and put on zoo display.
Even though the Democrats have controlled the House and thereby controlled the nations's Legislative agenda for 34 of the past 40 years, and controlled the White House those 6 years the GOP held a slim House majority, Obama will use that now tired excuse – "Look what I inherited"
I think for the first time in history, a bill in congress has the right name for whatever they do down there,,,,, CRAPO
Dodd-CRAPPO bill is what it should be called.
The American people have already taken enough of "that stuff" from inept banking, regulatory, and legislative officials to last a lifetime.
It's time to give up saving people who have not, nor still want to be "saved" as seen by how the bailout money has worked so far.
The FDIC is borrowing from which government? Ours or China's?
Is Obama going to give away money to everybody? His election might have been a historical event, but we'll only remember how he screwed up our country!
after allowing these banks the gift of allowing prime [crooked] mortage loan lending allowing money to disappear in thin air citi corp = saudi owned to take money and then they get to run w/ it. AIG wheres the US people s money . did we give to the tri-lateral comm? and these folks think the american people are ignorant.
Seeing Dodd in this controvery, the white knight, is the most amusing example of irony in political history.
We were never headed to THIS type of chaos because of Bush, we have taken a SHARP nosedive since Obama has had his hands in it. There is no denying it!
Much of why we're IN THIS MESS can be directly attributed to that idiot. The further away Dodd gets from making ANY decisions about banking – the better off America will be.
Yet another economic meltdown brought to you by:
The hands-off banking regulation fantasies of conservatives.
Why is this crook still walking the halls of Congress? He and Barney Franks need to be investigated for the housing collapse they caused.
The mattress looks safer now. Of course deregulation has helped bring this on. That and unbridled greed by overpaid CEO's and execs!
Barack had the chance and BLEW it.
He is a liar and a crook.
He is spending money on Healthcare, Education, Energy Credits, and 2million other issues.
The Economy is failing because of CREDIT, BANKS, and MORTGAGES.
He uses it as an excuse and than does not handle it.
You are a joke barack.
You handed a TOY HELICOPTER to the Prime Minister of the UK.
There you are again Greg in Pottstown. The government created the FDIC due to the bank failures of the Great Depression as a way to insure against bank failure again. This has been around for quite some time. I guess you have been living in a Socialist country without even knowing it. Time to get a new word to use Greg. The deregulations of the last thirty years (beginning with Reagan) caused greed within the free market/capitalist society. Anyone who understands human behavior should have recognized this as the outcome. Now due to greed, we are all paying the price.
During the summer, the banks got a whole bunch of stimulus bailout money. That money in turn was suppose to help us. Instead they went and gave bonuses, and did whatever they wanted with it, and there was no accountability. And how about the de-regulations that were put into place a number of years ago that started this whole fiasco?
I call this particular mess greed on the part of the banks. Too many easy loans to people who couldn't afford to pay them back. Customer comes in wants a loan to buy a house. Customer has no credit. No regulation. Hey bank gives the customer this loan anyway, for let's say $350,000 with a 9.6% subprime rate. The bank didn't care, they sell the loan or whatever and make a profit off of it. The customer wasn't educated. Customer got in on this ARM rate, or at low teaser rate of let's say payments of maybe $500 a month. Before long the montly payments are adjusting to the point that the customer can't afford to pay for the house. The house is foreclosed. The people at the bank who sold the loans made their money, they didn't care. The customer is out on the street and another foreclosed house, and now we have a real estate crisis to boot. Some people made tons and tons of money, but the banks themselves weren't repaid the money, but the employees who sold the loans made lots of money. Where was the accountability here? What I want to know is who initially allowed this to start happening?
And this will have the fulll support of the Republicans... bail them out... but God forbid that we should bail out Middle America!
HAVE FTC DO THEIR WORK AND LET THE BANKS AND AUTO COMPANIES MERGE!
let these guys fail, they are not so important
banks are a dime a dozen
It certainly looks like Citi is about to fall over. We need to break up these financial behemoths so that no single insured enitity is considered 'to big to fail'. Same for the auto makers. It's time that Americans are no longer at risk from these huge companies and their bad business decisions. This is a direct result of the merger and acquisition craze of the last 20 years. We had the wisdom to break up AT&T. When these corporations get too large, they own us, we don't own them.
A progressive corporate income tax that encourages huge companies to sell off parts of their business to small companies to avoid higher taxes is a very straightforward way to accomplish this. Your enemy is not President Obama. Americans have more to fear from the CEO'S of Exxon and GM.