Bubble Bubble is my Bank in Trouble?

No, it is not.

 

            Well on second thought, your bank might go out of business, be merged with another bank or sold off piece by piece. What are not affected are your deposits in a failed bank. The Federal Insurance Deposit Corporation (FDIC) will insure any and all deposits made within a bank up to $100,000. So as long as your deposits in your bank are under $100,000 then you are 100% protected from any type of bank failure.

            The recent failure of IndyMac was a great example of a self-fulfilling prophecy.  Due to the media and politicians putting banks and IndyMac in the negative news, it managed to freak everyone out and literally have a 1929 style “run” on the bank. This of course did in fact make the bank insolvent and require it to be bailed out by the FDIC. Whether or not that bank would have survived without the run is unclear, but what is clear is that IndyMac could not survive with all of its depositors withdrawing funds at the same time.

            So friends, largely ignore any information you hear about the earnings of your bank. (Unless you own stock in or work for that bank!)

Advertisement

One Response to Bubble Bubble is my Bank in Trouble?

  1. Flower Girl says:

    Interesting!

Leave a Reply

Fill in your details below or click an icon to log in:

Gravatar
WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.