U.S. FDIC restricts interest rates at weak banks
Fri May 29, 2009 3:38pm BST
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WASHINGTON, May 29 (Reuters) – U.S. banks that are struggling to stay afloat will not be allowed to aggressively ratchet up interest rates to attract customer money, a top bank regulator said on Friday.
The Federal Deposit Insurance Corp voted to bar a bank with insured deposits from paying interest rates that “significantly exceed” prevailing market rates if the bank is deemed not well capitalized. The new rule better defines what constitutes normal market rates, the FDIC said.
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Let’s dispose of any doubt that this is a “free market” economy!
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