In the United States and many other countries, the government guarantees a certain amount of each customer’s deposits in the event of a bank failure, to protect both consumers and the broader financial system.
and the U.S. government backstopping all deposits at those firms, here is the state of play of deposit insurance in the United States:Currently, the Federal Deposit Insurance Corp guarantees deposits of up to $250,000 per person, per bank. That limit was enshrined in law by the 2010 Dodd-Frank reform law passed following the 2008 financial crisis.
Customer deposits at federally insured credit unions are also protected up to at least $250,000 per individual depositor through the National Credit Union Share Insurance Fund, which is administered by the National Credit Union Administration.Generally speaking, accounts exceeding the $250,000 limit mostly belong to entities that need a lot of cash on hand to make payroll such as small businesses, nonprofits or municipal governments.More than $9.2 trillion of U.S.
On March 12, U.S. regulators including the FDIC announced that they would make all SVB and Signature Bank depositors whole, even those whose accounts exceeded $250,000, through a "systemic risk exception" designed to prevent broader contagion to the U.S. banking system. Any losses to the FDIC's deposit insurance fund will be recovered by a special assessment on banks, the FDIC said.
whether a higher federal insurance limit on bank deposits was needed in the wake of the collapse of SVB and Signature Bank.
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