Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
Yellen and the FDIC is in a tough spot. This is the important line, "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."<p>Thus, on one hand, I'm glad they're doing this, as it should help prevent wider bank runs, and it ensures that banks are the ones that are actually paying for it.<p>At the same time, this is yet another example of changing the rules in the middle of the game. Yellen has just broadcast that FDIC insurance is <i>essentially</i> unlimited, as long as you can threaten wider disruption to the economy.<p>I understand part of this is human nature but I really wish we could plan for these entirely foreseeable events <i>ahead of time</i> so that it's not just cases of "selective justice" with regards to who gets bailed out.