From the trial balloon department: Regulators tell the New York Times that they are seriously considering a plan to borrow from healthy banks. It seems odd perhaps, but there's not a lot of money left from traditional sources. Special fees to keep the FDIC fund replenished are no longer enough.

The FDIC rightly doesn't want to go to the Treasury for taxpayer funds. So really, this is the only option that seems viable. What may ultimately emerge, the Times notes, is some kind of blend of borrowing and special assessments. We could see other novel solutions, but you get the idea this is the one the regulators are betting on.

The banks are in favor of it. The ultimate issue is cost, but rates are low and there would appear to be little choice. Up to 300 banks may fail, so we're in about the 5th inning now. 

For more:
- here's the article

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