Greenwhich Bank rescue to cost other banks
Last week's rescue-by-merger of the troubled Greenwich Savings Bank in New York is going to cost other banks and savings institutions $280 million in higher premiums for deposit insurance, according to the Wall Street Journal.Skip to next paragraph
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The Federal Deposit Insurance Corporation (FDIC) arranged the merger of Greenwich with the Metropolitan Savings Bank by agreeing to cover losses. The move cost the FDIC $465 million, but hopes to regain 60 percent of it, or $280 million, from FDIC premiums paid by more than 14,000 savings institutions.
The bright spot is that insurance bills won't be increased, but the FDIC will keep $280 worth of premium rebates that would have gone out to member institutions next summer.