Friday, January 4, 2013

This Week in Bank Failures

The federal government is insolvent again, with Congress not likely to approve borrowing to cover its obligations until a new stopgap budget plan is agreed on at the last minute, on a day late in February. In its compromised position, the Treasury could not easily come to the FDIC’s rescue in the event of a large bank failure. Though unlikely, this could cause a delay in reimbursement for depositors in a giant bank failure. This circumstance makes it especially important for U.S. depositors not to rely fully on any single bank account, especially if it is in one of the largest banks. It is always a good idea to have several days of food at home and several day’s worth of cash, if you can manage this, so that an interruption in banking won’t cause any great inconvenience. If you have any extra money in the bank, minimize your risk of deposit loss by paying bills as soon as you receive them. Finally, as always, if you have a lot of money in the bank, you may need to have multiple banks, so that your deposits at any one bank don’t exceed the deposit insurance limits.