"Sweep Accounts: The FDIC Enhances Transparency" is a brief written by the Association of Financial Professional's Ernie Humphrey. It says, "As the financial health of banks continues to suffer corporations need to continue increased diligence in understanding the exposure they face for any financial institution to which they have any type of counterparty risk exposure. One source of this type of risk exposure is a sweep account arrangement with a financial institution. The nature of sweep arrangements and relative exposures associated with the most common types of arrangements are discussed in detail in an article authored by Anita Hill entitled 'Is your Sweep Safe?' originally published in the AFP Exchange Magazine." The AFP adds, "In response to the increasing number of financial institution failures throughout 2008, on January 27, 2009, the FDIC finalized its rule 'Processing of Deposit Accounts in the Event of an Insured Depository Institution Failure'. This rule established practices for determining deposit and other account balances at a failed depository institution. It also defines disclosure requirements for certain sweep accounts that became effective July 1, 2009.... [Y]esterday the FDIC released a list of Frequently Asked Questions (FAQs). These FAQs are a valuable resource for corporations to utilize to accurately accessing the counterparty risk associated with existing sweep arrangements or when considering new sweep account arrangements."
