Big discussion over at Mr. Mortgage about this issue. OTS is ready to close the bank, but FDIC reserves aren't enough to cover all depositors. Thank god FDIC has line of credit with Treasury or we would be in some serious trouble facing the banking industry.
"We were wrong. As a former FDIC chairman, Bill Isaac, points out here (http://www.securagroup.com/news/archives/articles/2008/AB080827.pdf), the FDIC Insurance Fund is an accounting fiction. It takes in premiums from banks, then turns those premiums over to the Treasury, which adds the money to the government's general coffers for "spending . . . on missiles, school lunches, water projects, and the like." The insurance premiums aren't really premiums at all, therefore. They're a tax by another name."
There were several articles, here is one of them. There was also talk on the discussion board. http://ml-implode.com/staticnews/2008-09-15_WaMuFailureCouldTriggerExtensionofDepositGuarantees.html
WaMu now rated junk... http://www.bloomberg.com/apps/news?pid=20601087&sid=aCbDcNYTh_cI&refer=worldwide