“In the darkest days of the financial crisis a year ago, Sheila Bair was hailed for having predicted the housing bust. Today, the chief of the Federal Deposit Insurance Corp. is fighting for her agency’s future.
“The FDIC was set up in 1933 as part of a successful attempt to rescue the banking system, and its deposit guarantees helped save the industry in the present crisis. But as lawmakers hash out the biggest overhaul of financial regulations since the Great Depression, the FDIC could wind up a shadow of its former self.” (Wall Street Journal, Friday)
Maybe without it banks wouldn’t leverage their deposits quite so much.
FEE Timely Classic:
“Private Deposit Insurance” by Jeffrey Rogers Hummel