Treasury Secretary Janet Yellen told lawmakers Wednesday that the Federal Deposit Insurance Corporation (FDIC) wouldn’t be offering “blanket insurance” for all U.S. bank deposits in the wake of the collapse and bailout of depositors at two major financial institutions.
Instead, the FDIC will only be safeguarding deposits at banks whose failures are designated as systemic risks in order to prevent bank runs from spreading to other financial institutions, Yellen told lawmakers during a Senate Appropriations Committee hearing. Federal regulators rescued depositors at Silicon Valley Bank and Signature Bank following their collapses, citing systemic risk.
Republican Sen. Bill Hagerty of Tennessee asked Yellen if insuring every deposit over $250,000 at every FDIC-insured bank would require congressional approval. (RELATED: Janet Yellen Says More Bank Bailouts Could Be On The Horizon)
“I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits,” Yellen responded.
Rather, the FDIC will evaluate institutions on a case-by-case basis, Yellen said, echoing the same policy stance she espoused on Tuesday when she said there could be bailouts…
