. . . . without a doubt that “Prompt Corrective Action” has been resoundingly, repeatedly and intentionally ignored.

The FDIC’s SACRED PLEDGE required it to demand that Prompt Corrective Action be followed and accurate MARKS be taken by all banking institutions on all assets. This in turn would have required the FDIC to seize a whole scad of banks including some really big ones in 2007 and 2008, and that requirement would be continuing today. Instead the FDIC has practiced “extend and pretend” just as the banks are, taking their word on asset valuations even though they know these valuations are false, as they have recently been taking losses of up to 40% across ENTIRE ASSET BASES WHEN TH...

. . . . without a doubt that “Prompt Corrective Action” has been resoundingly, repeatedly and intentionally ignored.

The FDIC’s SACRED PLEDGE required it to demand that Prompt Corrective Action be followed and accurate MARKS be taken by all banking institutions on all assets. This in turn would have required the FDIC to seize a whole scad of banks including some really big ones in 2007 and 2008, and that requirement would be continuing today. Instead the FDIC has practiced “extend and pretend” just as the banks are, taking their word on asset valuations even though they know these valuations are false, as they have recently been taking losses of up to 40% across ENTIRE ASSET BASES WHEN THEY CLOSE INSTITUTIONS.

BLUNTLY, THIS MEANS THAT THE BANKS ARE “VALUING” THESE ASSETS A FULL FORTY PERCENT ABOVE THE MARKET - A MASSIVE LIE THAT IS UNCOVERED WHEN CASH-FLOW FAILURES ULTIMATELY FORCE SEIZURE.

After the first couple of failures with this sort of loss nobody has an excuse for turning the other way instead of taking immediate enforcement action.

Period.

I further wish to point to another part of the FDIC’s statements:

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 8,246 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.


Loans are tax dollars my friends. They may be paid back but consider this fundamental reality: you are paying for these failures to enforce Prompt Corrective Action in either event, either in the form of assessments against all banks, which will be passed on to you in the form of higher fees and costs (30% interest rates and outrageous “overdraft charges” anyone?),

or directly as a taxpayer in the form of additional borrowing by the Treasury.

The fact of the matter is that we have this when it comes to “depositor insurance”:

This is not as a matter of design or flawed intent, it is a matter of policy.

What policy? This policy:


In 1991, Congress changed the way FDIC premiums were assessed, requiring banks to pay rates based on how well capitalized they were for the risks they faced. As bank failures subsided to less than a dozen a year by 1995, the FDIC’s reserves began to swell.

As a result, the agency cut to zero the premiums it charged to the 90 percent of the banks deemed safest. That free ride continued for 10 years.


But were they...

or directly as a taxpayer in the form of additional borrowing by the Treasury.

The fact of the matter is that we have this when it comes to “depositor insurance”:

This is not as a matter of design or flawed intent, it is a matter of policy.

What policy? This policy:


In 1991, Congress changed the way FDIC premiums were assessed, requiring banks to pay rates based on how well capitalized they were for the risks they faced. As bank failures subsided to less than a dozen a year by 1995, the FDIC’s reserves began to swell.

As a result, the agency cut to zero the premiums it charged to the 90 percent of the banks deemed safest. That free ride continued for 10 years.


But were they the safest? Or were these banks actually writing garbage paper to anyone who could fog a mirror? We now know the answer to that question, and its the latter.

None of the regulators involved did their job during these years, yet we are supposed to accept their statements at face value today?

Here is reality:

You will pay for the sins of these bankers, and they will not.


You will pay for the sins of the FDIC, OCC and OTS, all three of which have actively conspired to allow banks to claim valuations on “assets” that are demonstrably false. This in turn has led to massive violations of “Prompt Corrective Action” (PCA), the law that is supposed to prevent losses from occurring to the FDIC’s “DIF” (Deposit Insurance Fund) in the first place. We know this to be an indisputable fact as a consequence of the losses that the FDIC has and continues to incur when it closes institutions. If PCA is followed and asset valuations are not fraudulent the loss to the FDIC’s DIF when a bank fails WILL ALWAYS BE ZERO OR VERY CLOSE TO ZERO.

continue Treasury, FDIC And More: How Many Lies?