Taking a Chance on the Bailout

The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $100,000 per individual per bank. But, in the second quarter of 2008, only 63% of bank deposits were insured leaving $2,574bn in uninsured deposits in US banks. As faith in the financial system slides, some fear that a failure to put in place a larger guarantee on deposits could result in a run on banks. The revised bailout bill the Senate is voting on tonight includes a measure to temporarily increase insurance on deposits from $100,000 to $250,000.

Snapshot asks, if the new bailout package fails, will depositors lose more confidence and pull their uninsured deposits?

FDIC - Quarterly Banking Profile Q2 2008
Bloomberg - FDIC Seeks Authority to Raise Deposit Insurance Limit
IMF - Deposit Insurance and Crisis Management
Roubini - Roubini Sees `Silent' Run on Banks