"What part of supply and demand doesn't the FDIC bunch understand."
Actually, they understand it very well, and they know that these banks aren't practicing supply and demand, they're perverting it.
The worry is that the bank will attract new customer money, but it still won't be adequately capitalized and the bank will fail, leaving FDIC to pick up the tab for depositors' funds, including those new depositors who came in just for the interest rate.
This isn't a new action by the FDIC, it's been done in the past and is based on experiences during the S&L failures of the 1980s.
So, before all of you get bent out of shape and start screaming about big brudder squashing the poor widdle bank, remember:
1. The vast majority of banks that are in trouble right now are in trouble because of the actions of their owners/boards of directors, not some faceless government agency seeking only to crush the spirit of free enterprise.
2. Who pays when a bank goes belly up and people have to tap into the Federal Deposit Insurance Fund... What, you don't know who pays? Why you and I pay, of course.
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And you know, some of you are REALLY starting to remind me of trained parrots...
Someone mentions "the gubmint" and the conditioned, no-thought-involved, reflexive response is "AWK! GUBMINT CONSPIRACY TO CRUSH US ALL! AWK!"
I have such an urge to throw crackers.