A coalition of midsize banks across America is calling for the government to guarantee all deposits over the next two years, following Silicon Valley Bank’s emergency bailout, which insured all the firm’s deposits, regardless of size.
The Mid-Size Bank Coalition of America has sent a letter to regulators, saying that temporarily suspending the FDICs deposit insurance cap is needed so smaller banks can survive the ongoing banking crisis, according to Bloomberg.
Tesla CEO Elon Musk also endorsed the idea in a tweet early Saturday, saying that such a step is needed “to end the run on banks.”
After Silicon Valley Bank’s sudden meltdown and New York’s Signature Bank, attention has turned to banks who could be susceptible to a sudden withdrawal of deposits, too.
The FDIC currently covers deposits up to $250,000, although the agency’s decisions to shield depositors at SVB and Signature indicate an expanded willingness to support customers’ money.
Separately, Bloomberg also reported that billionaire investor Warren Buffett has been communicating with the White House, adding fuel to the speculation that he might offer financial support for the regional banks.
The MBCA sent its letter to Treasury secretary Janet Yellen, the FDIC, Comptroller of the Currency, and the Federal Reserve.
How Washington responds to a growing chorus calling for more extensive protections for FDIC deposits.
California Democratic Representative Ro Khanna is poised to introduce legislation to lift the agencies cap on insurance coverage, according to Dealbook Saturday.
