Another bad result is that zombie banks stay in operation longer than they should because uninsured depositors happily supply them with funds, knowing the F.D.I.C.
is experiencing “mission creep,” taking on a responsibility for uninsured depositors that it was never assigned.
In a footnote of a 2001 document posted on its website that’s intended to provide guidance to other nations’ regulators, it says that making uninsured depositors whole can be least costly “in rare cases.” (Which means: not more than 90 percent of the time.)
staff members, referring to full bank liquidations in the period before the financial crisis, said “a least-cost resolution almost always includes imposing losses on uninsured depositors.” Another F.D.I.C.
So I have to go by what the agency has stated in the past about its resolution practices.
Persons:
Ohlrogge, F.D.I.C, “
Organizations:
Deposit Insurance Fund, Office