FDIC Looks to Treasury Department for Possible Bailout

In spite of a $45.2 billion fund, the FDIC expects a need to raise premium rates for banks' insurance, and is considering opening lines of credit with the US Treasury Department.

They would, of course, repay the borrowed money when the bank's assets have been consolidated.

"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," says Chairman Sheila Bair.

FDIC: 117 troubled banks, highest level since 2003

Associated Press

Tue Aug 26

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