Monday, July 21, 2008
The IndyMac failure will take a chunk out of the fund the FDIC has to insure deposits. But bank experts aren’t worried about it running out of money.
How bad will it get? The widespread failures of hundreds of thrifts during the savings and loan crisis of the late 1980s and early 1990s ended up costing taxpayers about $250 billion in today's dollars, according to some estimates. That's because an FDIC-like fund in place to insure thrift deposits was overwhelmed at the time. Richard Bove, an influential banking analyst with Ladenburg Thalmann, wrote in a note last week that Washington Mutual (WM, Fortune 500), the nation's largest thrift with assets of $320 billion, is on the edge of the "danger zone."