FDIC: PR-35-2023 5/1/2023

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WASHINGTON – The Federal Deposit Insurance Corp. (FDC) today announced plans for a deposit insurance system and reform options to address the financial stability challenges posed by recent bank failures. The report, Options for deposit insurance upgradesIt examines the role of deposit insurance in promoting financial stability and protecting banking operations, as well as policies and instruments that can complement changes to deposit insurance coverage.

“The recent failures of Silicon Valley Bank and Signature Bank and the decision to approve systemic risk variances to protect uninsured deposits at those institutions raise fundamental questions about the role of deposit insurance in the United States banking system,” FDIC Chairman Martin J. Grunberg said in a statement accompanying today’s report. “This report states that the FDIC in 2015

As part of its analysis, the FDIC outlines three options for deposit insurance reform.

1. Limited coverageMaintaining the existing deposit insurance framework, which provides title and capacity insurance to depositors up to a certain limit (perhaps above the current $250,000 limit).




2. Unlimited coverageExtending unlimited deposit insurance coverage to all depositors.




3. Target coverageProviding different deposit insurance limits on account types where business checking accounts receive higher coverage than other accounts.

Of the three options outlined in this report, the FDIC believes that targeted coverage best meets the financial stability objectives of deposit insurance and the cost of depositor protection. Although some aspects of the report are within the scope of the FDIC’s legislative authority, these proposed alternatives require congressional action.

Following the failures of Silicon Valley Bank and Signature Bank, agency chairman Grunberg directed the agency to conduct an analysis of the current deposit insurance framework and identify reform options to consider, as well as additional tools to increase the effectiveness of the system. .

FDIC: PR-35-2023