After the House of Representatives shot down the $700 billion bail out plan yesterday, the FDIC has asked congress to temporarily raise insured deposits from $100,000 to $250,000.
I can honestly say I don’t know anyone with over $100,000 in the bank, but the measure is to ease worries about money in the bank. No one wants to lose the money they have in the bank…and I really don’t want to have to revert to stashing money under the mattress.
One thing I find odd about this is last week there was a report that the FDIC funds had dipped below minimum limits set by Congress, now they’re asking to up the insured amount. I’m not too sure about what would happen if an FDIC insured bank failed with several thousand accounts over $250,000. What exactly would happen to FDIC insurance if they ran out of money in this hypothetical situation?