IndyMac Meltdown

Pasadena-based IndyMac bank was shut down Friday by federal regulators during a run on deposits. The bank was already suffering from credit problems due to the high level of subprime mortgages it had with people with bad or no credit history. IndyMac has re-opened today with a new CEO put in place by the Federal Deposit Insurance Corporation, or FDIC. Customers lined up this morning outside IndyMac to withdraw their money. The FDIC insures individual accounts with up to $100,000, joint accounts up to $200,000, and individual retirement accounts up to $250,000. Those with more money in Indymac will be insured for half of that amount. IndyMac is the second largest bank ever to be taken over by the FDIC behind the 1984 takeover of Continental Illinois Bank. Larry talks with Kathy Kristof, business reporter, Los Angeles Times, and Chris Thornberg, economist and principal at Beacon Economics, about the health of the U.S. banking industry and if we can expect more bank failures.