The Bailout Bill Is Irresponsible

The Federal Deposit Insurance Corp. has the authority to do a net worth certificate program without legislation. The FDIC also has the authority, in conjunction with the Treasury and Fed, to declare that an emergency exists in our financial markets and announce that the FDIC will fully protect all depositors and other general creditors of failed banks until the emergency subsides.

The bailout legislation giving the FDIC unlimited borrowing authority from the Treasury is a meaningless ornament on the tree, as the FDIC is already backed by the full faith and credit of the U.S. government.

The increase in the deposit insurance limit is of very limited value, particularly to the smaller banks. It is not high enough to protect many of their business customers (at the very least it should have fully protected all checking accounts--particularly after the Treasury guaranteed all money market funds last week), and it will increase bank deposit insurance costs. It is... (Read Full Article)

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