FDIC Proposes Reform to Deposit Insurance

The Federal Depositors Insurance Corp (FDIC) has released recommendations to raise the per account deposit insurance limit above $250,000 on a targeted basis. The agency asserts that the proposal, if approved by Congress, would reduce risk to financial stability by covering higher deposit business accounts used for corporate payrolls and other business operations. Though 99% of U.S. deposit accounts hold less than $250,000, FDIC aims to decrease the possibility of bank runs like that of the recent First Republic Bank.

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