We have recently received worried queries about the safety of bank deposits. The failure of IndyMac, a Southern California bank which focussed heavily on less than prime mortgage loans, and whose failure will consume an estimated 20% of the FDIC reserve, has raised anxieties. The statement by the president yesterday that bank deposits are safe, and Chairman Bernanke's reiteration of this statement today, seem to have had a certain boomerang effect. Some have asked: if the FDIC is secure and bank deposits are indeed safe, why do the president and Bernanke feel the need to publicly assure the country that they are safe?
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