Do More Bank Failures Mean a Call to the Treasury to Back Up Your Checking Account?

The Wall Street Journal reports today that the government agency which insures your private checking and saving accounts up to $100,000 may need to borrow cash from the Treasury to protect YOUR deposited money due to an "expected wave of bank failures". Meanwhile, the New York Times reports the same story by saying the agency (the Federal Deposit Insurance Corporation, aka the FDIC) simply expects the banking "crisis to worsen".

Here's why you care: As we noted in a prior posting, 100 banks were reportedly on the FDIC watch list, and if the folks that are insuring your checking account are concerned enough now to raise the issue of borrowing from the Treasury, shouldn't you be concerned? With that in mind, we suggest the Wall Street Journal and New York Times articles.

Is there any good news? Yes, seems like FDIC Sheila Bair has been consistent in warnings, and with developing a plan. BUT, regardless as to whether your local bank is on the list or not, it does mean one thing: If you need a loan, it is a tough time to get one.