Date: Tue, 13 Mar 2007 12:00:49 -0500
From: beliavsky@aol.com
Newsgroups: misc.invest.financial-plan
Subject: Re: fdic ?--protecting bank accounts ?
   posting-account=j1mTRwwAAADzgndA_zkUptpIw3BECfQi
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	=37/X

I agree with rick++ that the Federal government would very likely bail
out depositors of failing banks, fearing systemic risk. Moody's
recently raised the ratings of several major banks because of this
perceived guarantee. Quoting a recent story from Reuters by Dena
Aubin:

NEW YORK, March 5 (Reuters) - Moody's Investors Service has raised its
ratings on Bank of America, JP Morgan Chase and Washington Mutual Inc.
as part of a sweeping review to include the role government support
would play in averting defaults.

The upgrades are among dozens announced by Moody's late on Friday
under a new method being applied to more than 1,000 banks in 90
countries over the next five to six weeks.

[...]

JP Morgan's strong deposit shares, extensive derivatives operations
and role as a major government securities clearer make government
support virtually certain, Moody's said in a statement.

"Due to the importance of these operations to the U.S. financial
system, the potential disruption to the financial markets from any
failure or default by such an institution would be massive," Moody's
said.