July 15, 2008 FDIC Chair: Nations banking system "absolutely safe"

WASHINGTON (AP) - The nation's banking system is "absolutely safe" and Americans' insured deposits in banks protected, the head of the Federal Deposit Insurance Corporation said Tuesday.

"Insured deposits are absolutely safe," Sheila Bair, FDIC chair, said in an interview on CBS' "The Early Show." "the banking system as a whole is absolutely safe."

The FDIC insures bank deposits of up to $100,000 and up to $250,000 for funds in retirement accounts such as an IRA.

Bair said that while there will likely be more bank closings - like that of IndyMac Bank, which last week became the largest regulated thrift to fail - they won't occur on a large scale and should be put in "appropriate context."

"We've had five bank closings this year," Bair said. "I won't say that banks don't have challenges right now. They do." But, she noted, "No insured depositor has ever lost a penny of insured deposits throughout the FDIC's 75-year history."

(Copyright 2008 by The Associated Press. All Rights Reserved.)