Billionaire investor Nelson Peltz says money flying out of banks is dangerous. Here's his idea for the Fed that he says will stop more bank runs
, earlier this month triggered deposit outflows at other regional banks.
Peltz said the deposit insurance program should be expanded by having customers at all banks pay insurance premiums to the Federal Reserve only if they want their accounts covered beyond the"The first $250,000 is insured. You can still spread [money] all over the place.
"You will have money flooding in here from all over the world," said Peltz about what would happen if officials were to enact his idea."People would feel safe. You can leave your money in your bank down the block, or you can give it to Bank of America. It doesn't make a difference." The FDIC's pool of insurance money comes from coverage premiums paid by banks and savings associations.
After SVB collapsed, the FDIC, the Treasury Department and the Federal Reserve protected all accounts that spilled over the $250,000 insurance limit. Roughly 89% of SVB's $175 billion in deposits were uninsured at the end of last year.
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