by Calculated Risk on 7/13/2008 04:25:00 PM

From the FDIC: FDIC Chairman Sheila C. Bair Issues Statement on IndyMac Federal Bank, FSB, Conservatorship

FDIC Chairman Sheila C. Bair said, "Over the past weekend, I have seen news reports which have fairly and accurately reported on the conversion of Indy Mac Bank into a conservatorship operated by the FDIC. I have also seen inaccurate and inflammatory reporting which could well cause needless, unnecessary worry and angst among bank depositors throughout the country.

That fact is that for insured depositors, IndyMac's conversion has been largely a non-event. The more than 200,000 customers of IndyMac with deposits of $18 billion are fully protected. It's important to keep in mind that the small percentage of uninsured are still covered for their insured amounts and half of their uninsured money. As assets of IndyMac are sold, they may receive even more. They have had continued access to their funds through ATMs, debit cards, and writing checks over the weekend, and on Monday morning, it will be business as usual.

All bank depositors should understand that their insured deposits are safe. IndyMac is only one of 8,494 depository institutions operating throughout the country and represents only .2 percent of banking industry assets. The overwhelming majority of banks in this country are safe and sound. The chance that your own bank will be taken over by the FDIC is extremely remote. And if that does happen, you will continue to have virtually uninterrupted access to your insured deposits. ...

I haven't seen the "inaccurate and inflammatory" reports. According to the FDIC, there are about $1 billion in uninsured deposits held by about 10,000 depositors. These depositors will receive all of their insured deposits, plus 50% of the amount over $1 billion (with some possibility of receiving more).

The FDIC has estimated the cost to the Insurance Fund is between $4 and $8 billion. Those are the key numbers.

Why anyone had more than the insured limit at IndyMac, with all the negative news, is definitely baffling. It looks like government officials are working on Sunday again ...