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Reply #125: In a worst case scenario, the deposits will be used to pay off.. [View All]

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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Oct-19-11 02:07 PM
Response to Reply #21
125. In a worst case scenario, the deposits will be used to pay off..
the derivative counterparties, wiping out the depositors.

Then the FDIC will have to step in and bailout the depositors. Only, the FDIC can't cover $1 trillion. They'll have to go to Congress and seek a bailout.

In essence, taxpayers are now underwriting Bank of America's crappy derivatives issuance. In exchange for taking on this excess risk, taxpayers get nothing.
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