Second, I’m sure you can figure out what the treasury and taxpayer have to do with loss-share agreements. The fact that you have to ask speaks volumes. Are you intentionally obfuscating or do you really not know? [/quote]
I really don’t know. Please enlighten me on this subject about which you clearly know so much. There are two “principals” in the loss-sharing arrangements – the FDIC and the acquiring bank. The FDIC takes the net losses (which hit the Insurance Fund) and such losses will be funded through deposit premiums paid by the banks that don’t fail.
At one point, the FDIC was considering borrowing money from the Treasury in order to replenish the Insurance Fund (in which case you could have argued that the Treasury and taxpayers were in some way involved), but that was politically unpopular (and for good reason), so the current plan is for the banks to pay 3 years of premiums up front. And if the losses are steeper than expected, the banks will just end up paying even greater premiums for a longer period of time.
So, specific to the loss-sharing agreements – let’s not get off course here – where do the Treasury and the taxpayers come in? Please be specific.
