As a follow-up to its white paper submitted to Congress this week, “Proposed $700 Billion Bailout Is Too Little, Too Late to End the Debt Crisis; Too Much, Too Soon for the U.S. Bond Market,” Weiss Research recommends that Congress focus less on bailing out imprudent institutions and more on fortifying the safety net of individuals caught in failed financial institutions. Some urgent steps include:
1. Fully fund and staff the Federal Depositors Insurance Corporation (FDIC) to better prepare for the possibility of multiple bank failures occurring at the same time. In order to prevent a spreading consumer panic and bank runs, it is mandatory that the FDIC avoid any delays in refunding insured depositors.
2. Close gaps in the coverage provided by Securities Investor Protection Corporation (SIPC) for investors. Specifically …
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