- PATRIOTIC POST - STAFF - MAR, 2023 -
Four prominent lawmakers in the United States who deal with banking issues announced on Sunday that they would investigate the possibility of raising the maximum amount of deposits that are covered by the federal deposit insurance to put a stop to the current financial crisis, which is characterized by the movement of large, uninsured deposits away from smaller and regional banks.
Democratic Senator Elizabeth Warren has supported the idea that the FDIC insurance ceiling should be raised.
Senator Mike Rounds, a Republican who serves on the Senate Banking Committee, raised concerns about the appropriateness of the current cap of $250,000, which had been raised from $100,000 in the wake of the financial crisis in 2008. The chairman of the House Financial Services Committee, Congressman Patrick McHenry, said that he would seek to improve the sufficiency of FDIC deposit insurance, but he noted that he had not had any talks with officials from the Biden administration about expanding the cap. The Federal Deposit Insurance Corporation (FDIC) provided a temporary guarantee for all deposits to protect smaller banks during the financial crisis that began in 2008.
Even though many large banks have made a move to deposit $30 billion into First Republic Bank, an institution that has been rocked by the failure of Silicon Valley Bank and Signature Bank, the pressure that is being put on midsized and smaller banks from the outflow of deposits has continued on Friday.
U.S. Treasury Secretary Janet Yellen, speaking to Senators, said that future guarantees of deposits beyond those in Silicone Valley Bank and Signature Bank would necessitate systemic risk analysis.
This is because the Dodd-Frank financial reform law requires Congress to pass a resolution of approval on an expedited schedule. Yellen also told Senators that the Dodd-Frank law requires Congress to pass.
Senator Chris Van Hollen told Fox News Sunday that Lawmakers and regulators need to address the $250,000 cap but that not every bank should be “bailed out.”
Van Hollen is a member of the Senate Democratic Caucus.