Senator Elizabeth Warren said she favors lifting the Federal Deposit Insurance Corp.s standard $250,000 cap, possibly into the millions of dollars, after Silicon Valley Banks failure exposed risk at US regional banks.
I think that lifting the FDIC insurance cap is a good move, Warren, a Democrat from Massachusetts whos a member of the Senate Banking Committee, said in a CBS News interview on Sunday. Now the question is, where is the right number on lifting it.
This is a question weve got to work through. Is it 2 million, is it 5 million, is it 10 million? she said on Face the Nation.
Other lawmakers voiced caution, reflecting in part the challenge of passing legislation in a divided Congress.
Well, its the first time Ive heard a proposal like that, House Financial Services Committee chair Patrick McHenry, a North Carolina Republican, told CBS. And I have not had a single conversation with the White House or the administration about deposit insurance, changing the levels.
Warren, long a champion of tighter regulation, amplified her criticism of Federal Reserve Chair Jerome Powell on the Sunday shows, telling CBS, NBCs Meet the Press and ABCs This Week that he took a flamethrower to banking regulations.
Banks with at least $50 billion in assets shouldnt have qualified for regulatory relief offered to smaller community banks, Warren said on This Week.
She declined to say whether President Joe Bidens administration is actively seeking to build support for raising the FDICs ceiling on deposit insurance. I dont want to talk about private conversations but I will say its got to be one of the options thats on the table right now, Warren told CBS.
Senator Mike Rounds, a Republican on the Banking Committee, suggested that lawmakers might need to reconsider the $250,000 deposit insurance level. Perhaps thats not enough, he said on NBC on Sunday. Should we bump that up?
Senator Chris Van Hollen, a Democrat from Maryland, echoed the Biden administrations stance that bank investors wont be bailed without explicitly backing a change in the FDICs umbrella.
Were not going to bail out any banks, he said on Fox News Sunday. There will be a question going forward as to how we deal with deposits over $250,000 as being covered here. But what the mechanism would be if we do that at all is something very much up to debate.
Warren has been at the forefront of critics blaming the Fed, regulators and former President Donald Trump for laying the groundwork for a crisis that took down Silicon Valley Bank and New Yorks Signature Bank and led a group of bigger firms to pledge $30 billion to help stabilize First Republic Bank.
Asked on CBS whether she has confidence in San Francisco Fed President Mary Daly after SVB tumbled into federal receivership, Warren said: No, I do not, while saying Powell and the Fed were ultimately responsible.
We need accountability for our regulators, who clearly fell down on the job, and that starts with Jerome Powell, Warren said.
She also called for accountability for bank executives, including clawbacks from former SVB Chief Executive Officer Gary Becker and lifetime financial industry bans for executives who were in charge at banks that failed.
With assistance from Anna Edgerton and Ian Fisher.