Magazine : Archives : 2nd Quarter 2009
Is the Law of Unintended Consequences at Work at the FDIC?
The Federal Deposit Insurance Corporation (FDIC) temporarily increased the limit on bank checking and savings deposits to $250,000 per qualified account through 2009. The move was made to reassure depositors in the wake of bank failures and panicked withdrawals amid the so-called subprime meltdown. It seems to have worked to mitigate depositor anxiety for now, but can we expect unintended consequences yet to surface from this seemingly helpful hand of government? The insurance program has worked well enough since instituted during the era of “The Great Depression”; however, failures during 2008 have resulted in a considerable depletion of the fund....
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