Why not?  If US Treasury can own Freddie and Fannie, why not throw FDIC into the mix.  Why don’t we just have the US Treasury buy up Ford & GM while we’re at it?

This is yet another alarming crack in the already stressed dam we call the American financial system.   Don’t say you weren’t warned people!

 (Reuters) – Federal Deposit Insurance Corp (FDIC) might have to borrow money from the Treasury Department to see it through an expected wave of bank failures, the Wall Street Journal reported.

The borrowing could be needed to cover short-term cash-flow pressures caused by reimbursing depositors immediately after the failure of a bank, the paper said.

The borrowed money would be repaid once the assets of that failed bank are sold.

Bair said such a scenario was unlikely in the “near term.” With a rise in the number of troubled banks, the FDIC’s Deposit Insurance Fund used to repay insured deposits at failed banks has been drained.

In a bid to replenish the $45.2 billion fund, Bair had said on Tuesday that the FDIC will consider a plan in October to raise the premium rates banks pay into the fund, a move that will further squeeze the industry.

The fact that the agency is considering the option again, after the collapse of  just nine banks this year, illustrates the concern among Washington regulators about the weakness of the U.S. banking system in the wake of the credit crisis, the Journal said.

Did you get that, “just nine banks this year” and FDIC is already borrowing.   Compare that to the S&L crisis where it borrowed money towards the end of the crisis.