The Bank Slate

INSIGHTS INTO THE BANKING INDUSTRY

FDIC mulls varied deposit caps for commercial, retail accounts

The Federal Deposit Insurance Corp. floated a plan to offer different deposit insurance caps based on account type.

The agency, in a new report on the deposit insurance system, discussed a scenario where business accounts receive “significantly higher coverage” than retail accounts.

Other options include making no changes to the current system, where deposits of up to $250,000 are covered, to unlimited coverage.

The FDIC said it believes having different caps is the optimal course of action, though doing so would require legislation.

Recent bank failures “and the decision to approve systemic risk exceptions to protect the uninsured depositors at those institutions raised fundamental questions about the role of deposit insurance in the United States banking system,” FDIC Chairman Martin Gruenberg said in a press release.

“This report is an effort to place these recent developments in the context of the history, evolution and purpose of deposit insurance since the FDIC was created in 1933,” he added.

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