Calls for Increased FDIC Protection Amidst Banking Instability

Mid-sized regional and community banks are urging the Federal Deposit Insurance Corporation (FDIC) to insure all bank deposits to prevent bank runs like those that toppled Silicon Valley Bank and Signature Bank. The FDIC ordinarily insures deposits up to a cap of $250,000 per depositor, which leaves balances in excess of that being vulnerable in the event of a bank failure. The uncertainty created by the bank failures along with federal regulators’ response has prompted some customers of mid-sized and community banks to withdraw funds from smaller banks and move them to larger, systemically important banks considered "too big to fail" – a dynamic that could worsen if additional banks fail.