The OTS has determined that the current institution, IndyMac Bank, is unlikely to be able to meet continued depositors’ demands...The immediate cause of the closing was a deposit run that began and continued after the public release of a June 26 letter to the OTS and the FDIC from Senator Charles Schumer of New York...
“This institution failed today due to a liquidity crisis,” OTS Director John Reich said. “Although this institution was already in distress, I am troubled by any interference in the regulatory process.”
It's so very good to be a CEO: whatever happens to the company, the CEO always wins, and wins big.
Here's proof that that theory is untrue.
I have 400k, 200k is not insured. They cut me a check on Thurs and I deposited into another bank, but there's a 5 days hold on the check.. Will the fund cleared in 5 days, or i'm in deep sh*t?
If you have more than $100,000 in your account, or if the total of your related accounts exceeds $100,000, your accounts may require review by an FDIC Claim Agent and you should call the FDIC to schedule an appointment with an FDIC claim Agent. The FDIC will pay uninsured depositors an advance dividend of 50% of your uninsured deposit.
So borrowing from the TAF is counted very much like borrowing from the discount window? What you are telling us then is that banks found it advantageous to borrow $50 Billion from the functional equivalent of the discount window (formerly used only by banks in trouble as there was a perceived stigma) and that this is business as usual?
The clear purpose of the TAF is to allow banks in difficulty to borrow from the Fed ANONYMOUSLY so as to avoid the stigma previously attached to the discount window (which was not anonymous).
The key quote: “But like the discount window, the money was lent directly to banks rather than primary dealers, and against a wide range of collateral rather than just Treasurys and agency securities.”
Yes, my good man, a wide range of collateral rather than just stodgy old low-yielding Treasurys and agency securities. The Fed can make great returns by taking these high-yielding, mortgage-backed CDOs as collateral.
So, the Fed is lowering lending standards…precisely the behavior that created the subprime fiasco.
The hardcore anti-Fed libertarian types were really rooting for the latter, which could have triggered, at best, a severe recession, and at worst a cycle of deflation that would have dropped us into a depression.
Freddie Mac Chairman and Chief Executive Richard Syron pocketed nearly $19.8 million in compensation last year, according to a Securities and Exchange Commission filing Friday, even though the mortgage company's stock lost half its value in 2007.
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