How Our Banking System Almost Collapsed

February 9, 2009

I was previously unaware at how close the US Economy came to complete failure immediately following the bankruptcy of Lehman Brothers. In an interview on C-Span, Rep. Paul Kanjorski of Pennsylvania, described how an electronic run on the bank almost overwhelmed the liquidity of the US Treasury.

According to him, within 1 hour, $550 billion was withdrawn, and if the Treasury had not closed down the accounts, within 3 hours, $5.5 trillion would have been withdrawn – enough to collapse the US Treasury system. If this had happened, the entire world’s banking system would have collapsed.

He said that after adding another $150 billion to the diminishing account, the Treasury was able to solve the problem by changing the FDIC insurance limit from $100,000 to $250,000. Apparently, this is what the closed door session between Ben Bernanke, Henry Paulson and the Congress was about that day.

Sourced from LiveLeak.com

Advertisements

One Response to “How Our Banking System Almost Collapsed”


  1. […] How Our Banking System Almost Collapsed […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: