It’s a scenario no one likes to think about. But in the past 15 years, it has unfolded with particular drama on several occasions — during the 2008 global financial crisis and again since mid-March, as turmoil has gripped the banking sector. The US Federal Deposit Insurance Corporation insures deposits up to $250,000 per person, per account, using a fund that banks pay into.
during the tumultuous period in the early 1980s. “I don’t think that’s served us well.” Some argue the US deposit insurance limit should be 100 times higher. Others claim increasing the cap would lead to much riskier behavior among lenders. Lawmakers in Washington are discussing reforms, though no clear proposal has emerged so far. The
insured all deposits at Silicon Valley Bank and Signature Bank last month using a Treasury exemption. , only 55% of domestic deposits were insured at the end of 2022, according to the agency’s data. In the United Kingdom, Numis bank analyst Jonathan Pierce estimates that figure is 65% for deposits by individuals and small businesses, and between 40% and 50% for larger corporate deposits. Could the caps be raised? That has been done before. In the United States, the threshold has been increased seven times since 1950. Shortly after Silicon Valley Bank collapsed, US Sen.