Question: A few years ago, I remember hearing that money market funds were covered by FDIC protection just like certificates of deposit and savings accounts. Are money market funds still FDIC-insured?
The short answer is no, money market fund holders don’t have the same (very limited) guarantees that holders of CDs, money market deposit accounts, and checking and savings accounts have.
See The Details Here: http://news.morningstar.com/articlenet/article.aspx?id=449684
MORE ON FINANCIAL INSTITUTION SOLVENCY RISK
Despite last year’s dip in U.S. bank failures, at least 758 lending institutions are at risk of failure over the next two years, according to an analysis by Invictus Consulting Group, which conducts stress and sustainability tests on all FDIC-insured banks for regulators, banks and investors.
Based on all publicly available data on banks for the third quarter ended Sept. 30, 2011, Invictus said that, absent corrective action to raise capital or merge, the 758 banks it identified are unlikely to remain viable primarily due to the weak recovery, which could trigger a new wave of loan defaults, according to the consulting firm. Approximately 200 of these banks are subsidiaries of publicly traded bank holding companies.
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