FDIC Reveals How Deposit Insurance Regime Could Change After Bank Crashes

  • The Federal Deposit Insurance Corporation, also known as the FDIC, recommended increasing the size of insured bank deposits for certain account types, a move which would follow the recent collapse of three major financial institutions.
  • First Republic Bank imploded on Monday after Silicon Valley Bank and Signature Bank collapsed in early March; all three companies had a majority of clients with account balances well above the $250,000 threshold insured by the FDIC, prompting the government-backed corporation to secure insured and uninsured deposits at the two latter institutions to decrease the risk of bank runs at other firms.
  • The FDIC issued a report on Monday which voiced support for “targeted coverage” such that business accounts can receive far higher insurance limits.