There’s speculation that the Federal agency that “guarantees” deposits against bank failures may face bankruptcy itself. Chris Brunner just posted some commentary that is very eye-opening at The LRC Blog.

“Last we heard from the FDIC, there were 117 banks on its secret “troubled” list, which matches pretty well with my list of banks with incredibly high Texas ratios. If we add up the deposits for those troubled banks, we get a value of $76 billion. So, the FDIC has $20 billion to cover 76 billion dollars of deposits in banks that are on the brink of collapse. Things are looking pretty bleak for the FDIC.

So how many of those 117 banks would it take to fail in order for the Deposit Insurance Fund to completely dry up? The answer could be as low as three. For example, if Westernbank of Puerto Rico, BankUnited, and Ocean Bank go under, and mind you they each have Texas ratios over 110, the Deposit Insurance Fund will be completely bankrupt. In fact, if a slightly larger bank, like AmTrust (which has a Texas ratio of 86) goes under, it would only take one of the other three to bring the Deposit Insurance Fund to the brink of collapse.

Don’t worry, folks. Your money is safe, and the FDIC has everything under control.”