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NEW YORK – The government agency that guarantees you won't lose your money in a bank failure may need a lifeline of its own.
The coffers of the Federal Deposit Insurance Corp. have been so depleted by the epidemic of collapsing financial institutions that analysts warn it could sink into the red by the end of this year.
That has happened only once before — during the savings-and-loan crisis of the early 1990s, when the FDIC was forced to borrow $15 billion from the Treasury and repay it later with interest.
On Thursday, the agency reveals how much is left in its reserves. FDIC Ch
That impugns the very existence of the FDIC Deposit Insurance "trust fund." The Bair truth is: there is no fund, only the system of IOUs which backs the entitlement programs. It turns out Congress, via the Treasury, has found yet another "unused" pool of money to pour into the budget each year. Collecting more fees to feed another wealth redistribution arm of government bureaucracy won't solve anything.