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Sheila Bain, Head of the FDIC, Goes on Fox and Lies

Reported by Melanie - July 15, 2008 -

Just Another Day at the Office on Fox

The first guest Fox featured today (July 15, 2008) on Your World w/Neil Cavuto was Sheila Bain, the head of the Federal Deposit Insurance Corporation (FDIC). Bain was on to discuss the Fed takeover of the IndyMac bank in Southern California which has been overrun this week with hundreds of customers withdrawing their money. Here are the heartbreaking pictures (go to the box showing the woman with head in hand, immediately to the right of the headline).

After substitute host Connell McShane quizzed Bain about the FDIC's rules and procedures regarding account insurance — how much is insured, what kind of accounts are insured, etc. — he asked, "We can debate over the extent of it but there are problems with the banking system in this country. What do we do about it? Ah, what's the most important thing that can be done to solve the problems that are plaguing that industry?"

This was Bain's response. "Right. Well, I think it should be re-emphasized that overwhelmingly, ah, the vast majority of banks are safe and sound, very well capitalized. We are seeing an increase in what we call our troubled banks. There will be an increase in bank failures but we've only had five bank failures this year. IndyMac, though a fairly sizable institution, is only one of 8500 depository institutions. It's .2% of industry assets so I think it is important to put the problem in context.

Here's the vid:

Comment: Fact is, "IndyMac was the fifth bank failure this year. There were three failures in 2007 and none in 2006 or 2005." See it here, smack dab on the FDIC's own website. So when Bain says we've had only five bank failures this year (and the year is only half over) yet there were a mere three failures over the last three years, that certainly doesn't put "the problem in context." Five failures in six months is actually pretty alarming. Oh, and hey thanks Fox for calling her on this and for being on top of it. Gawd.