Get Thee a Cookie Jar (or Mattress)

Read the blues from MoneyNews.com:
Report: FDIC May Borrow Money From Treasury
Wednesday, August 27, 2008 8:32 AM
The Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.
The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.
The borrowed money would be repaid once the assets of that failed bank are sold.
"I would not rule out the possibility that at some point we may need to tap into (short-term) lines of credit with the Treasury for working capital, not to cover our losses," Chairman Sheila Bair said in an interview with the paper.
Bair said such a scenario was unlikely in the "near term." With a rise in the number of troubled banks, the FDIC's Deposit Insurance Fund used to repay insured deposits at failed banks has been drained.
In a bid to replenish the $45.2 billion fund, Bair had said on Tuesday that the FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.
The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks, Bair said.
The last time the FDIC had borrowed funds from the Treasury was at nearly the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered.
The fact that the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis, the Journal said.
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http://moneynews.newsmax.com/headlines/fdic/2008/08/27/125366.html

Year of the Rats?

Although originally published in Bloomberg, this came to me via Though Criminal and was at this link: http://www.thought-criminal.org/article/node/1236. The Bloomberg link is at the bottom.
ICBC Deposes Citigroup as Chinese Banks Rule in New World Order
Feb. 4 (Bloomberg) -- There's a new world order for banks, and the Chinese, for the first time, are the biggest, with a market capitalization that has made perennial No. 1 Citigroup Inc. a distant also-ran behind Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd.
[...] The reversal of fortunes is the clearest sign yet that shareholders are betting on banks in the emerging markets rather than the U.S. institutions that dominated the financial landscape for most of the past century. As recently as 2003, there were 13 American banks ranked in the top 20 and not a single Asian rival, data compiled by Bloomberg show. Now, there are four Asian and six U.S. institutions. The collapse of the subprime mortgage market wiped out almost $100 billion of value from the three biggest U.S. banks in the past six months.
It was just a year ago that Citigroup was the world's biggest bank by market value, and ICBC was beginning its fourth month as a publicly traded company.
Today, Beijing-based ICBC is the largest financial-services firm and Citigroup has tumbled to seventh on growing concern that the 196-year-old company is no match for a bank based in the world's fastest-growing major economy that has more customers than the combined populations of France, Spain and the U.K.
[...] At the same time, the biggest western banks are enduring the worst U.S. housing market in a quarter century, which has led to more than $145 billion of subprime mortgage-related losses and investment markdowns and sparked concern about a possible U.S. recession. The value of American banks has been further dented by declines in the dollar during five of the past six years.
[...] ``If you take out the Chinese, the main disturbance in the rankings is between large universal banks and regional-oriented banks,'' said Roy Smith, a finance professor at New York University's Stern School of Business and a former partner at Goldman. ``The universal banks have been harder hit by subprime.''
http://www.bloomberg.com/apps/news?sid=aBhYtHt.s3gM&pid=20601103