It is not without a degree of anger that I read the Dec. 4 story, "Nine Banks Fail in One Day--Most in FDIC History." As a past employee in the legal department of the FDIC, I am appalled at the cavalier attitude taken by the agency with respect to recovering assets that rightfully belong to the public and the FDIC.
I specifically refer to the failure of the FDIC to recover from the directors and officers liability insurance for the acts of negligence by the directors and officers of the failed banks. While I was an employee of the agency, I raised the issue, and it was my understanding that a division of the legal department was going to concentrate on attempting to recover the liability coverage legally required for directors and officers for malfeasance in office.
In legal parlance, it is often stated "but for" the negligence and the malfeasance of the directors and officers, the banks generally would not fail. Numerous studies have indicated this to be the case.
I therefore raise the issue of why the insurance carriers should profit by collecting premiums for services they are generally not called upon to perform: representing the directors and officers and being required to cover damages.
RALPH G. MARCARELLI