Friday, August 29, 2008

Analyst: FDIC Will Need Half A Trillon Dollars

Analyst: FDIC Will Need Half A Trillon Dollars

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Chris Whalen, managing director of Institutional Risk Analytics, in an interview on CNBC, said:

They need about a half a trillion dollars in borrowing authority, and they need a vehicle to own these banks while we triage them and sell them.


The FDIC Deposit Insurance Fund currently has approximately $50 billion in assets.

He also said a big bank could go down:

It depends on the loss rate. If we are way over 1990s levels, by say the third quarter, then I would tell you there’s going to be some institutions that may not be able to raise private capital and may need a bridge.

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