OK, here is an announcement from the Government regarding the banking industry and which banks they will invest in. The stock market has been a roller coaster and the Fed’s had to step in and do something to stop the run on the banks. Still waiting on specifics, about what they will do for the Mortgage industry.
Bank investments, FDIC changes
The federal government today outlined new initiatives to strengthen markets and the economy, including investing at least $250 billion directly into financial institutions and temporarily expanding Federal Deposit Insurance Corporation (FDIC) coverage on non-interest-bearing deposit accounts.
The capital purchase program will use funds from the recently passed Emergency Economic Stabilization Act — legislation that empowers the Treasury to use up to $700 billion to provide greater liquidity in the markets and promote overall financial market stability. The $250 billion will be invested into some of the nation’s banks, with about half of that total going to nine major institutions, including Bank of America, JPMorgan Chase and Citigroup. In return, the federal government will receive equity stakes in these companies in the form of preferred shares.
In addition, FDIC coverage will be temporarily expanded to an unlimited amount on all non-interest-bearing deposit accounts (which include all checking accounts, with the exclusion of Interest Checking, Tiered Interest Checking, Business Interest Checking and Analyzed Business Interest Checking) for the next 30 days. Banks are able to extend this expanded coverage through Dec. 31, 2009 for a fee. This action by the FDIC is expected to benefit small businesses by providing additional coverage for accounts through which they manage their day-to-day operations.
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