This just in...
With the failure of yet another large banking institution on Friday, David Krikorian, Independent candidate for U.S. Congress from Ohio's second district, has sent a letter to both the House Financial Services Committee and the U.S. Senate Committee on Banking, Housing, and Urban Affairs, urging them to increase funding for the Federal Deposit Insurance Corporation (FDIC) to protect Americans from the widening banking crisis.
"Congress has been slow to act on many of the crises we are facing today, and I don't want to take any chances with the wave of bank failures that we are starting to see all over the country," said Mr. Krikorian.
"We must take the necessary steps immediately to insure that all depositors have access to their money if and when their bank fails. The FDIC is set-up to handle the occasional bank failure, but the wave of large bank failures that we are starting to experience will overwhelm the system, and given Congress's penchant for being slow to act , the last thing we need is to see people, who are already struggling with high inflation, lose access to their deposits. Therefore, I am asking Congress to immediately fund expansion of the FDIC."
"I set out to represent Ohio's second congressional district, because I saw the financial crisis unfolding across our country, and I intend to be a loud voice for effective action."
And what is his idea for handling the situation? Well,
here is his open letter to Congress...
DAVID KRIKORIAN LETTER- July 16, 2008.
I am writing to urge you to take immediate action to address the funding deficiency in the Federal Deposit Insurance Corporation (FDIC) in order to protect the hard-earned savings of everyday Americans from the growing risk of wide-scale bank failures in the United States.
Congress created the FDIC in 1933 in response to the thousands of bank failures that occurred during the early stages of the Great Depression. As you know, the FDIC is an independent agency of the federal government and is funded by premiums from member institutions and earnings from its investment account. According to its website, the FDIC’s insures in excess of $3 trillion in customer deposits against FDIC assets of approximately $50 billion (before the impact of the takeover of IndyMac Bank, F.S.B. which, per estimates, will cost the FDIC between $6 billion and $8 billion).
Due to the over-the-counter derivative crisis that is affecting the solvency of hundreds, if not thousands, of financial institutions, my concern is that the FDIC’s insurance fund is too small to adequately protect depositors. The leverage ratio of the FDIC is greater than 60 to 1. Fannie Mae and Freddie Mac operated using a similarly leveraged balance sheet and, as you know, on July 14, 2008, Fannie Mae and Freddie Mac required a financial rescue orchestrated by the Secretary of the Treasury and the Chairman of the Federal Reserve.
I urge you to lead the effort to fully fund the FDIC so that the deposits of millions of Americans are secure and the faith of our banking sector is fully restored and without question. Our financial system is in peril. Failure to fully protect depositors and restore the faith in our banking system will result in a severe economic downturn and will cause great harm to the American people. I urge you to act without delay.
Sincerely,
David H. Krikorian
I think there was an idea in there somewhere... Other than talking down the economy, I mean...
