US exploring ways to guarantee the country’s 18T of bank deposits: Report

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U.S. officials are reportedly considering ways to expand the current coverage of deposit insurance to insure all U.S. bank deposits should the current banking crisis worsen.

The current Federal Deposit Insurance Corporation (FDIC) deposit insurance limit is $250,000, Multiple bank failures in MarchI got a call asking me to increase the amount.

Organizations such as the American Federation of Midsize Banks on March 18 called for caps to be lifted for the next two years, to protect depositors and avoid withdrawing capital from smaller banks to larger, seemingly safer banks. mentioned the need.

According to Bloomberg on March 21 report Treasury Department officials are now discussing the possibility of the FDIC expanding its current deposit insurance beyond the cap to cover all deposits, citing “people with knowledge of the talks.” .

The move will ultimately thwart the level of emergency powers federal regulators have and whether they can raise insurance caps without formal congressional consent.

However, Bloomberg sources say US officials do not see the need for such drastic moves at this time, as the recent steps taken by financial regulators are likely to be sufficient.

As such, they said they have potential strategies in place in case the current situation worsens.

Following the failures of Silvergate, Signature Bank and Silicon Valley Bank in recent weeks, the Federal Reserve rolled out its $25 billion Bank Term Funding Program (BTFP) on March 13th.

Related: UBS Group agrees to $3.25 billion ’emergency bailout’ from Credit Suisse

Meanwhile, at a press conference on March 20, Spokesperson Carine Jeanpierre specifically stated: Asked If the federal government supported expanding FDIC insurance from small and midsize banks to $250,000 or more.

Jean-Pierre was tight-lipped about the Biden administration’s views, saying “our goal is to ensure the stability of the financial system,” before adding that creating a level playing field is “a matter for the Treasury Department and banks.” It is the focus of regulators,” he said.

“And as you can see, our actions at the direction of the President this week should give Americans confidence in their deposits. We will be there when they need us.”

“And again, that’s what we’re going to focus on. No news right now. But obviously we want to make sure the financial system is stable. ‘ she added.