The Debate Over Deposit Insurance: What You Need to Know.

The Biden administration and financial regulators are signaling that no U.S. bank depositors, even those with more than the $250,000 federal insurance cap, will lose money in a bank failure to prevent a cascading series of bank runs. However, there is no formal FDIC insurance for any deposits over $250,000 right now, and abandoning the cap on deposit insurance without explicit Congressional authorization could create a "moral hazard" issue and raise questions about how banks pay for FDIC insurance.