Warren says proposal to lift FDIC insurance cap has

Washington — Massachusetts Senator Elizabeth Warren said on Sunday that Congress’s proposal to raise the Federal Deposit Insurance Corporation (FDIC) Insurance cap Its current $250,000 limit is an option that “has yet to be put on the table” as lawmakers debate how to respond to the rapid collapse of the two banks earlier this month.

“I think lifting the FDIC insurance cap is a good move,” Warren said in an interview with “Face the Nation.” “Now the question is, where is the right number to lift? But recognize that we have to do it, because these banks are underregulated, and if we lift the cap, we need — or have to — regulators to do it. They also have to rely more on their jobs.”

The Democratic senator said the key question for Congress to work on is where to set the insurance cap for FDIC deposits.

“Is it $2 million? Is it $5 million? Is it $10 million?” she said. “Small businesses need to be able to rely on their own money to make payroll, pay utility bills. Non-profits should be able to do that. They’re not the ones who are responsible for the safety and health of their individual banks. can investigate. That’s what regulators have to do.”

Sen. Elizabeth Warren on “Face the Nation” on March 19, 2023.

Warren declined to say whether she is in discussions with the White House about plans to raise the FDIC insurance level above its $250,000 cap, but said “it’s one of the options right now.” is on the table.”

suddenly The closing of Silicon Valley Bank On March 10, following Collapse of Signature Bank of New York Days later, federal banking regulators were sent in to improve the banking system and reassure Americans that they could trust the financial system.

As part of Emergency measures by the Biden administration This was to ensure that all depositors with accounts at Silicon Valley Bank had access to all their money. The Federal Reserve also established a new lending facility to help financial institutions meet the needs of depositors.

But the collapse of the two banks has put renewed scrutiny on top banking regulators, including Federal Reserve Chair Jerome Powell.

Warren said Sunday that regulators and executives at those banks must be held accountable, and specifically criticized the Fed and Powell, who he said is “a dangerous man to have in this position.”

“We need accountability for our regulators who clearly fell on the job, and that starts with Jerome Powell, and we need accountability for the executives of these big financial institutions,” Warren said. . “Look, Gary Baker and the other guys who blew up these banks should be clawing.”

The Massachusetts senator also said he doesn’t trust San Francisco Fed President Mary Daley, given public disclosures in early December that there were problems with the Silicon Valley bank.

“The Fed should have acted, but the San Francisco Fed and the Federal Reserve Bank,” he said. “Remember that the Federal Reserve Bank and Jerome Powell are ultimately responsible for overseeing and overseeing these banks. And they’ve made it clear that they believe their job is to ease regulations on these banks. Now we’ve got that. Results have been seen.”

Warren said Powell needs to “turn around 180 degrees and put these banks under more careful scrutiny,” and Congress tighten banking regulations.

“This whole tranche of banks has been underregulated for five years now. And people are very concerned about when you lift the hood, what’s under the hood, because the regulators are clearly not on top of their job,” he said. have been.” “That’s why I’m calling right now for changes at the Fed in its regulatory approach and for changes in Congress so that we withdraw authorization to ease these regulations.”

Warren separately on Sunday called for An independent investigation into bank and regulatory failures, and a request from the Treasury, FDIC and Federal Reserve inspectors general to provide an initial report to Congress within 30 days.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *