Who Pays for The Bank Failures and Bailouts
The FDIC is responsible for overseeing the safety of your bank deposits and insures your deposits up to $250,000 for individuals per one bank. These bank failures, takeovers, or closings are paid for by insurance premiums the FDIC charges the member banks and institutions. No taxpayer money is used by the FDIC.
The bank and investment companies bailouts were done by an act of congress. The Emergency Economic Stabilization Act of 2008 signed by President George Bush on October 3, 2008. This law authorized the US Treasury to spend up to $700 billion dollars tp purchase distressed assets and make capital infusions into US and foreign banks. It also increased the FDIC deposit insurance amount to $250,000 from $100,000 on bank deposits.
The Bailout Act has resulted in over almost $600 billion dollars in disbursements to date with almost $300 billion dollars repaid to the Us government. The list of companies helped is over 900 by the end of November of 2011. The biggest names on the list include Fannie Mae, Freddie Mac, AIG, Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, GMAC Financial Services, Goldman Sachs, Morgan Stanley, U.S. Bancorp, SunTrust Bank, American Express, Bank of NY Mellon, KeyCorp, OCWEN Mortgages, General Motors, and Chrysler.
The list includes banks, insurance companies, Financial Services, mortgage servicers, investment fund, hedge funds, state housing orgs, and credit unions. While the intention of the bill was to save our financial system some of the funds was used to try and stimulate the economy by giving funds to General Motors and Chrsyler.
On November 28, 2011 Bloomberg reported that the Federal Reserve Bank has loaned over $7.7 Trillion dollars to the nations banks with interest rates of as low as Zero%. additionally Bloomberg reported over $13 billion of income the banks made in investments of the near zero% loans they got from the Fed. JPMorgan Chase was one of the biggest benefactors of this slick move.
Remember the FDIC isn’t responsible for spending any taxpayer’s money but the Federal Reserve and the Bailout Bill are responsible for billions of spent taxpayers dollars.