Skip to search.

BankUnited Won't Be Last Bank Failure: The FDIC Is Going to Have a Busy Year

Posted May 22, 2009 01:19pm EDT by Aaron Task
Related: ALL, PRU, AMP, XLF, FAS, ^DJI, ^GSPC

Updated from 1:19 p.m. EDT 

Update: The FDIC Friday voted to impose an emergency fee on member banks in order to replenish its insurance fund, Bloomberg reports.

Earlier:The failure of BankUnited FSB, a Florida thrift with $12.8 billion in assets and $8.6 billion deposits, is a stark reminder the crisis in the banking sector is far from over. But it's also a reminder that deposits at FDIC-insured banks are safe, up to the $250,000 limit.

"There's going to be more bank failures, there's no question about it," says Dave Kansas, a contributing editor at The Wall Street Journal. "The FDIC is going to have a lot more work to do this year."

A private equity team has agreed to buy BankUnited's banking operations, and retail branches were scheduled to be open normal hours on Friday. But BankUnited's failure will cost the FDIC's insurance fund $4.9 billion, a pretty big hit considering the fund stood at $19 billion at the end of 2008.

"Bank deposit insurance is the bedrock of the financial system," says Kansas. "I cannot envision a scenario where [the Federal government] does not permit the FDIC to be fully flush."

Indeed, the government has said the FDIC can borrow up to $100 billion from the Treasury and fees banks pay into the fund are likely to rise.

Kansas goes into detail about federal insurance programs in his latest book, "The End of Wall Street as We Know It", including those for life insurance policies, as also discussed in the accompanying video.

Go to Tech Ticker

There are no comments yet

Post a comment

Sign in to post a comment, or Sign up for a free account.
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.