The failure of IndyMac (or seizure at least) the largest American bank to fail in years caused a rush on the bank as depositors sought to take their money out of the bank prior to the collapse. No word that any attempt was successful, so the next step is assistance by the FDIC (Federal Deposit Insurance Corporation) which was set up to handle such banking crises. The IndyMac website has a link to instructions for depositors from the FDIC on how to go about claiming funds.
The Federal Reserve System was set up to be a lender of last resort in the event of a financial crises that jeopardized the stability of the banking system, which were common in the 19th and early 20th centuries. Safe banks protect depositors as much as they protect the banks. But this system was not sufficient to either prevent the bank runs following the crises of 1933 nor compensate for the lost deposits. The Glass Steagell Act led to the creation of the FDIC
which provided limited protection for deposits. Now one is protected for $100,000 in deposits, and possibly more. It remains one of the primary achievements of the New Deal.
The question posed by the current crisis is whether the money set aside for reimbursements, $53 billion, is sufficient for what some predict will be as many as 150 bank failures in the coming months. The IndyMac failures will cost $4-8 billion, which must be recouped somehow.
