The Federal Deposit Insurance Corporation (FDIC) announced the deadline for banks to opt-out of their Temporary Liquidity Guarantee Program (TGLP) has been extended to Dec. 5 from Nov. 12.
Any banks opting out of the program before Dec. 5 will not be charged interest on extra deposit insurance or debt guarantees.
The FDIC said they made the decision so that banks could have more time to assess whether they wanted to participate in the program.
The TGLP program, announced on October 14th, was created to guarantee senior unsecured debt and provide full coverage for deposit accounts. "It is lack of confidence that these guarantees are designed to address," said FDIC Chairman Sheila C. Bair.
The FDIC automatically enrolled all eligible firms in the program at no-cost for the first 30 days, after which point they would start charging fees. Thus, banks now have until early December to opt-out.
By Megan Ainscow
©CEP News Ltd. 2008