Oh, what news reports are buried below the political machine hype.
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, -- Chairman Sheila Bair
They also are considering raising premiums in October. Bair also is planning on charging higher premiums to the more risky banks:
The agency also plans to charge banks that engage in risky lending practices significantly higher premiums than other U.S. banks
This is pretty early in the game to be borrowing money. According to these reports the FDIC has only borrowed money at the tail end of the S&L crisis in the 80's.
SmartMoney has more details:
The last time the FDIC borrowed funds from Treasury came at the tail end of the savings-and-loan crisis in the early 1990s after thousands of banks were shuttered. That the agency is considering the option again, after the collapse of just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis.
Kind of a mixed message. Bair is implying a short term need to borrow for liquidity purposes but doesn't expect to tap into a separate $30B credit line that is available.
One fact is the FDIC has never in it's history borrowed from the Treasury in this separate $30B credit line.
Is this more evidence we're in for one hell of a ride?