Seeing that AIG needed an $85B bail out which exceeds the total FDIC depository insurance reserves of $53B it appears FDIC is a joke. Reading their annual report they cite three relatively small bank failures were a challenging situation for them in 2007. They project contingent liabilities for anticipated failures of insured institutions at only $124 Million!!! Their total resolution equity is only $3.6B. As of December 31, 2007, there were 77 insured institutions with total assets of $22.2 billion designated as problem institutions for safety and soundness purposes (defined as those institutions having a composite CAMELS2 rating of â4â or â5â), compared to the 51 problem institutions with total assets of $8.5 billion on December 31, 2006. Resolving Financial Institution Failures During 2007, three FDIC-insured institutions failed. The accompanying chart provides liquidation highlights and trends for the past three years. No federally-insured financial institution failures occurred in either 2005 or 2006. Liquidation Highlights 2005 - 2007 (Dollars in billions) 2007 2006 2005 Total Institutions Resolved 3 0 0 Assets of Resolved Institutions $2.34 $0.00 $0.00 Net Collections from Assets in Liquidation * $1.25 $0.17 $0.37 Total Assets in Liquidation * $0.91 $0.35 $0.44 Total Dividends Paid * $1.65 $0.17 $0.44 Savings Over Cost of Liquidation # $0.36 $0.00 $0.00 Metropolitan Savings Bank in Pittsburgh, Pennsylvania, was the first FDIC-insured institution closed since June 2004. This institution was closed by the Pennsylvania Department of Banking on February 2, 2007. NetBank of Alpharetta, Georgia, was closed by the Office of Thrift Supervision on September 28, 2007. NetBank was an Internet bank and had no physical branches. Miami Valley Bank of Lakeview, Ohio, was closed by the Ohio Superintendent of Financial Institutions on October 4, 2007. How small of a run will it take on the banks before they are upside down?