According to Yahoo Finance, US officials are now looking for ways the FDIC can cover all bank deposits over $250,000. This will be without consent from a “divided Congress.”
Authorities said they don’t have to do it yet. They want to establish a strategy if the situation worsens.
Our Banking System Is Sound?
“We will use the tools we have to support community banks,” White House spokesman Michael Kikukawa said, without directly addressing whether the measure is being studied. “Since our administration and the regulators took decisive action last weekend, we have seen deposits stabilize at regional banks throughout the country and, in some cases, outflows have modestly reversed.”
D.C. is worried about midsize banks that would require broader government intervention. Three lenders collapsed this month and a fourth fights for survival.
First Republic Bank tumbled an additional 47% on Monday. Industry leaders struggle to find a way to bolster the company’s finances.
The Treasury Is Going to Bail Out Banks
“One legal framework under discussion for expanding FDIC insurance would use the Treasury Department’s authority to take emergency action and lean on the Exchange Stabilization Fund; the people said,” Yahoo reports.
According to Yahoo, “That pot of money typically is used to buy or sell currencies and to provide financing to foreign governments. But the fund, created in the 1930s, has been used as a backstop for emergency lending facilities by the Fed in recent years. It’s the only pot of money under the full authority of the Treasury.” secretary, with other spending and financing under the jurisdiction of Congress.
We have a sound banking system. Our Constitution is holding strong. Just kidding. It’s clownish banking.
Does anyone remember when we gave the Treasury the power to bail out banks without any input from Congress?