Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, March 28, 2024 | Back issues
Courthouse News Service Courthouse News Service

FDIC May Extend Credit Protection For a Price

WASHINGTON (CN) - As the Federal Deposit Insurance Corporation phases out the Debt Guarantee Program, initiated to cover debt issued by insured banks during the financial crisis last fall, it seeks comment on whether the program should end Oct. 31, as planned, or be replaced with an emergency facility to guarantee debt for a price.

The additional guarantees would be for institutions unable to issue non-guaranteed debt to replace maturing debt because of market disruptions or other circumstances beyond their control. After prior approval granted on a case-by-case basis, the FDIC would guarantee senior unsecured debt issued through April 30, 2010.

Under this alternative, the FDIC would charge an annual participation fee of at least 300 basis points on any FDIC-guaranteed debt issued by participants, as a disincentive to use the facility unless absolutely necessary and to help defer the cost of the program.

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Loading...