Lawmakers and regulators are discussing the possibility of increasing the FDIC insurance limit on bank deposits following the collapse of Silicon Valley Bank and Signature Bank.
Why it matters
The debate over raising the FDIC insurance limit is significant as it could help prevent a financial crisis by stemming the drain of large, uninsured deposits away from smaller and regional banks.
What the papers say
Reuters reports that U.S. House of Representatives Financial Services Committee Chairman Patrick McHenry believes it is too early to tell if new legislation is necessary. Axios highlights that lawmakers, academics, and some in the financial industry are debating whether the FDIC limit needs to be increased or abolished altogether. Senator Elizabeth Warren supports lifting the FDIC insurance cap, according to Reuters. The Guardian reports that Warren is calling for an independent probe into the bank failures and criticizes Federal Reserve officials. President Joe Biden has stated that the banking crisis has calmed down, as reported by Reuters.
How we got here
The recent failures of Silicon Valley Bank and Signature Bank have raised concerns about the stability of the banking system and the need for increased deposit insurance.
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