Busted: Bankers and The Global Economy

August 4, 2008

U.S.: What Banking Fraud Means to Depositors

There have been a number of bank failures and the recent accumulation is increasing in pace. The FDIC sees many bank failures down the road. If you are uncertain why banks should fail, you are at the right place. “Busted: Bankers” highlights corruption and fraud in the global banking industry without the restrictions of mainstream media and politics.

The public word is that regulators are bracing for 100-200 bank failures over the next 12-24 months. If the FDIC is anywhere near right, the United States has what could be considered to be an alarming increase in the number of U.S. commercial bank failures. This debacle, despite props from the Federal Reserve, has been caused by creative banking instruments and outright fraudulent activities in the name of profits for bankers and investors. The resulting contraction of the housing market and credit squeeze on a global basis are of their making, a hefty portion at taxpayer expense.

FDIC insurance is the ultimate standard for protecting the assets of banking depositors in the United States. The FDIC has raised their mandatory banking insurance rates to cover the expected expense of bailout. The government claims that the FDIC has ample resources. While this reality is debatable if several shoes drop at once, the U.S. federal government backs the FDIC. Deposits that meet requirements under the $100,000 account limit are fully protected, as good as the government that backs them.

How do you protect your money and keep that money in a safe bank? To begin, always look for the FDIC logo at your bank branch. If you are using online services or a bank, look for the logo as well. However, don’t assume that the FDIC label is accurate in the name of safety and healthy skepticism.

Simply go to the fdic.gov and locate “bank find“. In this way, you can be certain that the bank that you selected is FDIC insured. The FDIC also has a list of bank rating agencies on its Web site that can evaluate the financial stability of a bank. To get a free evaluation, check out bankrate.com, remembering where your loyalty lies. Banking information is generally set up to secure confidence. The information you are given is designed to that end. However, regardless of bank strength, FDIC insurance will secure compliant deposits. That is what you really need to know about.

As an individual, personal deposits are insured up to $100,000 in an FDIC-insured institution, including savings, checking, certificates of deposit and money market accounts. This assumes that your accounts are non-brokered. When you register with the bank directly, make sure that your deposits are non-brokered and will reside with the institution instead of being handled by a third-party. This will ensure your financial safety.

While banking fraud has meant plenty as far as creating a troubled economy, as a depositor, you are fully protected with FDIC insurance. The protection is as good as the government protection that is trusted in, which in essence, comes straight out of taxpayer pockets. Bank runs and panic aren’t a necessary part of your reactions.

In the meantime, investing and spending with a certain amount of prudence is importance. If you are involved in large financial transactions, plan ahead without waiting until the last moment. Some depositors with IndyMac put off dealing with large transactions until the last moment, putting a financial kink in meeting their obligations. The problems could have been prevented by securing a cashier’s check a few days ahead instead of at the last minute. A good rule of thumb is to avoid putting off anything that you can do today, especially where your financial life is concerned. ~ E. Manning

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1 Comment

  1. It means that your deposits are not safe. We need realignment of the system. There are too many corrupt money hungry people with too much power….

    Bob, we do need realignment of the system at the very least. Safety of the deposit is as safe as the government and no more than that. Whether deposits are judged to be really safe is in the eye of the beholder. It is all relative. However, considering the safety of the system, deposits in the banking are backed up, in essence, safe from loss. I am not promoting the system per se, but rather the insane need to panic about things that are minimal at worst. Taking care of personal business is important within the system while it is in place. Now, inflation…that’s another thing that continues to rob the world of it blood, sweat and hard work. ~E.M.

    Comment by Bob jennings — August 4, 2008 @ 10:44 am


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