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http://online.barrons.com/article/SB122125823888930015.html?mod=googlenews_barrons
I have also received distressing news about PayPal accounts, which may be vulnerable if eBay runs into deep trouble. As a seller, my account with PayPal is not FDIC insured. They say on their website that they put the money in an independent bank and if that bank fails I am protected by "flow-through insurance," but their website also states that there is no FDIC insurance if PayPal becomes insolvent. Click on the FDIC link on the PayPal website to see the entire disclaimer.
The new rules about PP withholding funds from sellers has me wondering whether that was designed to reduce the risk of a run on the bank. for example, most brick-and-mortar banks have rules about how much you can withdraw in cash each day, which is also designed in part to insulate the bank from a ruinous run (it's also designed to reduce the amount of cash the bank needs to keep in its vault).
I am planning to keep my PayPal balance near zero to minimize my exposure. If there is a "run" on PayPal like there has been a run on some banks lately, the lack of FDIC insurance may hurt me. This, to me, is where the eBay empire is most vulnerable: its own banking system does not have to comply with FDIC requirements designed to create faith in the system.
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