FDIC extension gives breathing space to banks

The difficulties banks are facing in borrowing capital are ample justification for extending the TLGP scheme, say observers. Indeed, there are calls for the scheme to become more permanent

The vote by the Federal Deposit Insurance Corporation on March 17 to extend the debt guarantee of the Temporary Liquidity Guarantee Program from June 30, 2009 to October 31, 2009 was both expected and a comment on continuing dysfunction in the US markets, according to senior New York bankers.

"It is the right thing to do for the market because we're still not fixed. We're still broken," says a syndicate manager at a Wall Street firm.

Although tensions in the global markets have relaxed a little in