One of the top Republicans on the House Financial Services Committee suggested on Tuesday that the United States should begin temporarily insuring every bank deposit in the country as a way to build up confidence in the national banking system after the collapse of Silicon Valley Bank over the weekend.
Rep. Blaine Luetkemeyer (R-MO) said the move would help smaller banks navigate the fallout of the SVB collapse as well as help shore up trust in the U.S. financial system, according to Politico. Luetkemeyer's proposal would build on efforts by the Biden administration and other regulators that have already begun insuring deposits at SVB and Signature Bank, which also collapsed.
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“If you don’t do this, there’s going to be a run on your smaller banks,” Luetkemeyer told the outlet. “Everyone’s going to take their money out and run to the JPMorgan’s and these too-big-to-fail banks, and they’re going to get bigger, and everybody else is going to get smaller and weaker, and it’s going to really be bad for our system.”
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This story is developing and will be updated.