There were some other very interesting presentations at the conference hosted by the Federal Reserve Bank of Boston last week. Fed Chair Ben Bernanke spoke on Financial Regulation and Supervision after the Crisis while Princeton Professor Alan Blinder's message was

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As we all know, the Federal Deposit Insurance Corporation (FDIC) guarantees depositors that they’ll get their money back if a bank fails, at least up to a certain amount. To fund its operations, the FDIC collects small fees from the banks that are held in reserve for the purpose of taking over troubled banks and paying off depositors.

Since the Great Depression, a period marked by widespread runs on banks, the FDIC has done a good job of fulfilling its mandate. So how are they doing in this crisis?

In a nutshell, they are in trouble.

The FDIC insures 8,246 institutions, with $13.5 trillion in assets. Not all of them are going bankrupt, of course. Yet as of late July, a disturbing 64 banks had gone belly up this year – the most since 1992 – costing the FDIC $12.5 billion. At the end of Q1, the agency was already asking for emergency

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h1 style="text-align: center;"bBank Nationalization/b/h1h2 style="text-align: center;"bspan class="Apple-style-span" style="color: rgb(102, 0, 0);"Bank Nationalization Day/span/b/h2a href="http://3.bp.blogspot.com/_tvshDVnXSLc/SS_l74vGpJI/AAAAAAAAAf4/J6EgOxMC024/s1600-h/RBS-DundasHouse.jpg"img style="margin: 0px auto 10px; display: block; text-align: center; cursor: pointer; width: 320px; height: 200px;" src="http://3.bp.blogspot.com/_tvshDVnXSLc/SS_l74vGpJI/AAAAAAAAAf4/J6EgOxMC024/s320/RBS-DundasHouse.jpg" alt="" id="BLOGGER_PHOTO_ID_5273686505679135890" border="0" //a Old HQ pictured. Following failure of shareholders to buy more than 0.24% (only £36m for 56m shares) of the Royal Bank of Scotland Group's £20bn share issue, RBS (1) (including Citizens Bank, USA, and NatWest Bank, England) today became the third to be formally nationalised (nearly 58%). The small take-up of the issue by existing shareholders had been expected as the offer price of 65.5p was 10p higher than the price at which the shares were trading, so those who did buy on paper lost £5m doing so. The share issue by RBS was part of the government's plan to recapitalise banks. The government will pay £15bn for the majority stake in the bank plus £5bn of ...

There is certainly a lot of commotion at the moment not least surrounding the rescue plan to shore up the two biggest US mortgage lenders Fannie and Freddie Mae, but also, and if we stay in the US we had the collapse of IndyMac, in Spain Martina-Fadesa is in the ropes and in Denmark we have Roskilde Bank. Especially, the last event prompted me into action as I decided to have a closer look at the Danish economy and where it might be heading. In many ways Denmark is similar to other credit crunch struck economies not least in the context of experiencing a severe unravelling of a housing boom. As we saw last week this is now beginning to have collateral damage. Yet, Denmark is also a bit different not least because the economy is going into this crisis with a positive balance both on the ...

by Claus Vistesen: CopenhagenStagflation, credit crunch, bank bails-outs, and housing market busts are all concepts that are unfortunately now becoming all too familiar to the current Danish economic discourse and indeed even to the Danish public at large as they read their morning paper over breakfast, or listen to the radio on their way to work. And not of course in their United States version, but rather in their homegrown variant. But just how serious is the construction and banking problem in Denmark?A quick initial glance at the short term data definitely suggests that a serious batch of storm clouds may well be gathering above the economy. Not only did Denmark claim the dubious honor of being the first economy in Europe to exhibit a technical recession but it was also recently handed its very own banking crisis à la Bear Stearns and ...