US exploring ways to guarantee the country's 18T of bank deposits: Report
U.S. officials are reportedly studying ways to expand the current scope of deposit insurance that would guarantee all U.S. bank deposits should the current banking crisis worsen.
The current deposit insurance cap under the Federal Deposit Insurance Corporation (FDIC) stands at $250,000, however, following the collapse of several banks in March, there have been calls to increase that amount.
Organizations such as the Mid-Size Bank Coalition of America called on March 18 for the cap to be lifted for the next two years, citing a need to protect depositors and to stop capital being pulled from smaller banks for supposedly safer-looking heavyweights.
According to a March 21 Bloomberg report citing “people with knowledge of the talks,” Treasury Department staff members are currently discussing the possibility of the FDIC being able to expand the current deposit insurance beyond the max cap to cover all deposits.
After some intense "studying" they realised that they needed $17 trillion to guarantee all bank deposits. pic.twitter.com/Z15HLiBp23
The move would ultimately hinder on what level of emergency authority federal regulators have, and if the insurance cap can be increased without formal consent from Congress.
Bloomberg’s sources indicated, however, that U.S. authorities don’t deem such a drastic move necessary at the moment, as recent steps taken by financial regulators are likely to be sufficient.
As such, they stated that a potential strategy is being whipped up just in case the current situation gets worse.
The US Govt says it studies ways to guarantee all bank deposits if the banking crisis grows.They say that because they know that the banking crisis will grow?They don’t have the $18 trillion required to protect
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