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Due to the collapse of Indymac, the FDIC was compelled to allocate anywhere between $4-8 billion in assets to take over the company.

The Federal Deposit Insurance Corporation (FDIC) is an independent agency which was started by the Congress that maintains the effectiveness and confidence of the people in the nation’s financial system by insuring deposits, examining and supervising financial institutions and managing receiverships.

In other words FDIC is like a combination of the FSA and the Treasury in one. They try to look after the money owned by the ordinary Americans. When a bank looks like it is going to break, they step in to protect the savings of the people.

FDIC faces a huge challenge with over 7500 regional and national banks that’s why they have over $50 billion assets to look after the nation’s savings health.

The collapse of the Indyman broken off in a bigger way, at that time when analysts are predicting 150 banks could collapse over the near term.

Since the year 2000, FDIC has already had to recover assets from 23 banks and the collapse of Indymac took a big chunk of their cash reserves.

The problem is, once the FDIC starts to price up Indymac’s assets, a domino effect could then hit the US banking sector further.

When the FDIC starts to sell off the Indymac’s assets, it would define the market price of those assets, because this is the way to calculate what an actual sale price on them is. That means every bank or financial institution that has had similar assets can bring back those assets on their balance sheets, and do so at their new fire sales price.

Now, the question is which banks will be the next, and what will be its impact on the rest of the US banking sector, it is also worth asking how badly this will affect the finances of the FDIC.

News provided by http://www.firstchoiceloan.co.uk