2008-08-24 — housingdoom.com
CDARS’ reach lets retail savers from Lebanon, NH to Anchorage, AK blow past the FDIC $100k limit like it wasn’t even there. Since deposit insurance is, after all, insurance, I’m guessing that one motivation for the limit was to help protect the Corporation against adverse selection. As savers start to pile into (over $100k) deposit insurance because they foresee there could be difficulties with certain banks, FDIC could well be seeing more insured deposits than they had modeled for pre-GLB at the banks they might have to shut down over the next while.
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