FDIC proposes extending unlimited deposit insurance

06/24/2009 | Wall Street Journal, The

The Federal Deposit Insurance Corp. proposed a six-month extension on deposit insurance for transaction accounts that do not earn interest. Banks would have to agree to cover the protection through higher fees. Sheila Bair, chairwoman of the FDIC, said the program would be phased out, but circumstances might warrant the extension. "I do think it helped stabilize the system, and it enabled banks to buttress their ability to lend and also prevented some failures of some otherwise viable institutions," Bair said.

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