Deposit insurance: Bad timing

Sheila Bair’s quarterly update on the health of the US banking sector had more than its share of bad news. With more banks failing and deposits growing quickly, the Federal Deposit Insurance Corporation chairwoman said it needed to raise its premiums. That’s bad timing. In fact, Bair made the announcement just after urging banks to review their dividend policies to save cash. Increasing premium payments looks necessary, but it will nibble into troubled banks’ already depleted capital. Granted, ...