Analyst: FDIC Will Need Half A Trillon Dollars

WEDNESDAY, AUGUST 27, 2008

Analyst: FDIC Will Need Half A Trillon Dollars

Chris Whalen, managing director of Institutional Risk Analytics, in an interview on CNBC, said:

They need about a half a trillion dollars in borrowing authority, and they need a vehicle to own these banks while we triage them and sell them.

The FDIC Deposit Insurance Fund currently has approximately $50 billion in assets.

He also said a big bank could go down:

It depends on the loss rate. If we are way over 1990s levels, by say the third quarter, then I would tell you there’s going to be some institutions that may not be able to raise private capital and may need a bridge.