I Wrote Me A Manual.

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Banks To Bail Out FDIC?

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Hilarity:

WASHINGTON — Tired of the government bailing out banks? Get ready for this: officials may soon ask banks to bail out the government.

Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.

The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.

A hallmark of the financial crisis has been the decision by successive administrations over the last year to lend hundreds of billions of taxpayer dollars to large and small banks.

“It’s a nice irony,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics, a consulting company. “Like so much of this crisis, this is an issue that involves the least worst options.”

I don’t know about you, but I’m weary of any plan ‘strongly’ supported by bankers and their lobbyists.

The American people are tired of handouts being given to irresponsible banks with no strings attached. So to spice it up a bit, banks may possibly begin lending money to the government so they can turn around and continue rescuing sick banks…

Wow.

It doesn’t say exactly how the government would pay them back but it’s entirely possible that banks would stand to profit from the plan. After all, it’s one of their profiting staples. They lend and profit off interest.

That this is even a possibility tells you how serious an economic situation this nation has been in for the last couple of years. The government is so waist-deep rescuing the banking industry, they need to borrow from that very industry to finance the continued rescue and guarantee of deposits. It would be laughable if it weren’t so terrifying.

Let’s Hope (™ Barack Obama) the White House pushes for regulations that prevent something like this from happening again.

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Written by PJ

September 22, 2009 at 12:15 pm

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