The Irrelevant Increase in the FDIC Insurance Cap

Adam Levitin over at Credit Slips has this nice post about the irrelevancy of raising the FDIC insurance on bank deposits from $100,000 to $250,000 as part of the bailout bill. Sure, 250K in insurance might help in the rare instance where someone mistakenly leaves more than 100K in one failing bank (rather than spreading his or her money among several institutions), but the increase will (obviously) affect almost no one, and, besides, it will do nothing to ameliorate the current credit crisis.

Comments

[Brian Wolfman]

Hello. After many years at Public Citizen, I have moved to Georgetown law school, where I will be a co-director of the Institute for Public Representation (IPR) and head IPR's Civil Rights Clinic. You can reach me at 202 661 6582 and wolfmanb@law.georgetown.edu.

If you want to contact the Litigation Group, contact Litigation Group Director Allison Zieve at azieve@citizen.org.

Brian Wolfman

[Ga car insurance]

Another thing about the FDIC insurance is that if a bank does fail... you will not get your money right awsy. It may take months to get it. There is debate whether you will even get all of it.

All they say is that it is insured "up to $250,000"

Does anyone know the facts about this?

[shane]

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[Jennifer Johnson]

In my opinion, the increased FDIC coverage was not to help the individual, but rather the businesses that have CDs and are participating in the CDARS program throught their local bank. In essence, they have increase FDIC coverage from $50 million to $150 million for businesses that might want to hold short term cash. See www.cdars.com

[Car Insurance]

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