Investors are still worried about a run on deposits of some ailing banks while massive lifelines buy more time
But Treasury Secretary Janet Yellen acknowledged to Congress on Thursday that, unlike SVB and Signature Bank, not all deposits exceeding the FDIC's $250,000 insurance limit will be guaranteed in the future.
And that's part of the problem: because regulators declared SVB and Signature Bank systemically important and guaranteed all their deposits, other lenders — and their customers — were left wondering whether they would receive similar treatment, according to former FDIC Chairwoman Sheila Bair. "It creates uncertainty, and the ones that do not get the bailout are under more pressure. What we're seeing with First Republic — their uninsured depositors are uncertain,"If the situation worsens, then regulators should get authority from Congress to insure all deposits above the $250,000 limit across the US banking system, Bair added.
In the case of Credit Suisse, depositors have been fleeing since well before SVB failed. Last year, deposits fell by more than $150 billion, with about $100 billion of that in the fourth quarter alone.
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