Banks rush to sell FDIC-backed bonds

Top Wall Street firms are in something of a frenzy to issue FDIC-backed bonds, under the Fed's Temporary Liquidity Guarantee Program. Citigroup and Wells Fargo are marketing such deals now, according to the Financial Times. Goldman Sachs, JPMorgan Chase, Morgan Stanley and Bank of America have already raised billions via this new security type, which offers dramatically reduced interest costs. The issue of course is what banks will do with these new funds, if anything, beyond pad their capital ratios. It's a bit of a stretch to assume it will be lent out in short order, not in this economy. Other smaller institutions will likely follow suit.

For more:
- here's the FT article
- Bank of America places $9 billion in FDIC-backed bonds. Article