A step closer to Americas Financial end game

Question, what is the designation of the Federal Deposit Insurance Corporation?
Lets take a look at Wikipedia:

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. As of November 18, 2010, the FDIC insures deposits at 7,723 institutions.[2] The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).


More is available on Wikipedia, but the gist is, it insures people cash deposits. (savings, checking, etc).
It is not for insuring corporate trading or risky assets.

But what if a bank, that exists due to suspending accounting practices since the Great Depression, and is solvent due to new legal accounting tricks, wants FDIC insurance?
What if that same bank has over 1 Trillion dollars in deposits AND has dodgy derivatives from a previous purchase, should the bank be allowed to transfer those dodgy debts from it's high risk trading group to the bank holding company, thereby shifting risk to the FDIC?

Apparently the answer is, yes.  No matter how much risk assets have, and even though those assets have ZERO to do with normal banking, the assets (debts) can be shifted from the higher risk trading group into the bank holding company, and thereby force the FDIC to insure something that no corporation in their right mind would ensure.

This may be great for the depositors of that bank, but it won't be good for the other savings depositors from more stable banks.  If an event is triggered, this will become a tax on all savers in banks NOT insolvent to pay off the debts to the insolvent bank.

If BOA ever triggers a FDIC event, FDIC will be insolvent for years to come just from BOA.
Good luck on the banks to follow.  From article:

Bank of America is the only U.S. lender that lacks a rating of A3 or higher among the five firms listed by the Office of the Comptroller of the Currency as having the biggest derivatives books.

From FDIC
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.


This entry has earned the recognition in the Financial Ground Zero event series.