Word: depositers
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...Monday, Sept. 29, when it was clear that Wachovia, the enormous U.S. bank, couldn't open its doors to customers due to a lack of funds, the board of the Federal Deposit Insurance Corporation (FDIC) voted for the first time since its creation during the Great Depression to take a "systemic risk exception" to the rules that usually limit what it can do. The exception allowed the FDIC to cover some of Wachovia's potential losses, enabling the bank's sale to Citigroup and its continued operation...
...cuts because it focuses on inflation. Nouriel Roubini, an economics professor at New York University and one of the few who predicted the extent of the current crisis, called yesterday for "at least 150 basis points (1.5 percentage points) on average globally." Roubini also backed the idea of deposit guarantees, guaranteeing interbank lending and other measures. "At this point, anything short of these radical and coordinated actions may lead to a market crash, a global systemic financial meltdown, and to a global depression...
...Glitnir, another Icelandic bank. It did indeed downgrade all three a month later. In July, Kitty Ussher, then Economic Secretary to the Treasury and now a minister in the Department for Work and Pensions, was quizzed by an influential House of Commons committee after newspapers reported that the Icelandic Deposit and Investors Guarantee Fund had insufficient resources to cover its potential liabilities. "Are you satisfied, Minister, that British investors in Icelandic banks are fully guaranteed in the event of a bank collapse, then?" wondered Michael Fallon, the Conservative MP who chairs the committee. "I am satisfied that the law exists...
...result was a parallel system almost as big as the banking system that had none of its post-Depression stabilizing pillars: no deposit insurance, no access to the lender of last resort, no resolution regime and only a patchworky, inadequate framework of restraints for risk-taking. In the old system, Americans' deposits in regular banks financed the system. In the shadow banking system, Americans' deposits in money market funds provided the asset anchor. As AIG teetered on the brink in mid-September, a run began by institutional investors on the money market funds...
...less than one-tenth of the total assets of its three biggest banks, all of which are in trouble. British financial authorities warned on Tuesday that Icesave, a subsidiary of Landsbanki, Iceland's second biggest bank, might not be able to pay out the estimated $7.8 billion in deposits of some 300,000 British customers, who would then have to file claims to deposit guarantees set by Iceland and Britain, which would cover up to $87,000 of an individual's savings. One London-based customer said she had tried over a week ago to withdraw her money from Icesave...