In recent months, the financial markets have been focusing on Europe, the Fed, the fiscal cliff, and even money market fund reforms. One topic that has not received much attention is the looming expiration of the unlimited guarantee for noninterest-bearing transaction deposit accounts, which was a mandate of section 343 of the Dodd-Frank Reform Bill. The mandate was based on the FDIC Transaction Account Guarantee Program or TAG that was instituted back in October of 2008, with the aim of stabilizing the banking sector during the financial crisis. The program alleviated fears of "bank runs," and bolstered depositors' confidence that their money was safe and protected by the U.S. government. Since then, the guarantee program has been extended twice - once in 2009 and again in 2010. Furthermore, the Dodd-Frank Wall Street Reform provided another two years of depositor insurance until December 2012, unless extended yet again.
Read the Article (PDF)