Unlimited deposit insurance: A radical idea that’s gaining steam in Congress
marketwatch.com
marketwatch.com
I think it's understandable that the current depositors from failed banks that are over the FDIC limit feels hurt if they don't get made whole, but this sort of thing cannot continue. Unless the insurance is paid for by the banks themselves, the risk transfer is not fair.
> Unless the insurance is paid for by the banks themselves
It is though. The FDIC insurance fund is funded by premiums paid by banks.
those premiums were calculated based on the $250k limit.
So the premiums are too low, it must be argued, if the actual limit is higher than $250k. Which means someone took a loss here paying out the insurance on deposits.
Who this "someone" is right now, i am unable to tell. The gov't says it's not the taxpayer. But i have a sneaky feeling that it will eventually be the tax payer.
Till the time the World uses your currency as the Global Reserve, you can print all the money you want.
When the actions of politicians in one country, make the rest of the world suffer, wonder how long will that privilege last.