FDIC Builds Banking System Credibility With Bank Seizures
Posted on December 21st, 2009
It’s easy to assume that a “gotcha” story like this one from Bloomberg, about the FDIC seizing bank assets, should undermine the credibility of the U.S. banking system. The story describes how a rapper’s tour bus, reeking of marijuana, was taken by the FDIC and sold after the failure of an unnamed Atlanta bank.
The Bloomberg story goes on to describe other odd seizures of property related to FDIC bank liquidations, such as ATM machines, microwave ovens, and ash trays.
Ironically, seemingly demeaning stories like this one may actually help to build confidence in the U.S. banking system. Certainly, public shaming rituals like this have been a part of human history during crisis healing periods. The urge to see bad behavior punished has been an abiding part of civilization for a long time now.
Meanwhile, prominent other banks, such as JPMorgan and Goldman Sachs, have increased profitability as these other banks have gone under (and as Bank of America and Citigroup have become wards of the state). The calling of attention to the total dissolution of failed banks thus draws attention to the staying power of profitable banks.
If you are concerned that CDs, money market accounts, and savings accounts remain as safe as possible, you may want to consider news of FDIC bank seizures good news overall.
Source: FDIC Builds Banking System Credibility With Bank Seizures
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