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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (86355)	9/15/2007 1:45:43 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

Neither the FSCS in the UK, nor the FDIC in the US, have a cap on the amount they can levy their member banks in order to pay for covered losses at failed banks. As each bank fails, the insurance premium on each bank rises to make the payment, unless: the central bank or central government step in to make the payments; or unless the loss is funded with the issuance of debt, which is has become frequent with the FDIC to spread out costs over a larger premium period. All of their member banks must become insolvent before the FSCS or FDIC can fail. As a practical matter each insurance scheme is backstopped by their central bank, each of which would step in with freshly made money to prevent a complete collapse of the banking system in their nation. fscs.org.uk .