The Silicon Valley Bank head office in Santa Clara, California, on March 13, 2023.
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A union of midsize U.S. banks, Mid-Size Bank Coalition of America (MBCA), has actually asked regulators to extend FDIC insurance coverage to all deposits for the next 2 years, Bloomberg News reported on Saturday pointing out an MBCA letter to regulators.
The letter argued that extending insurance coverage will right away stop the exodus of deposits from smaller sized banks, which in turn will support the banking sector and bring back self-confidence in banking system, the report stated.
The collapse of Silicon Valley Bank, which held a high variety of uninsured deposits beyond the FDIC ensured limitation, triggered consumers to move their cash to larger banks and activated sharp selloff in banking stocks.
According to the Bloomberg report, the group proposed that the broadened insurance coverage program be spent for by the banks themselves by increasing the deposit-insurance evaluation on loan providers that select to take part in increased protection.
The FDIC did not right away react to a Reuters ask for remark while MBCA might not be right away called.
