Warren says the proposal to remove the FDIC insurance cap “needs to be on the table now.”

washington — Massachusetts Senator Elizabeth Warren said Sunday that a Congressional proposal to raise the Federal Deposit Insurance Corporation’s (FDIC) insurance ceiling from its current limit of $250,000 is an option “on the table now.” must,” as lawmakers debate how to respond to the rapid collapse of two banks earlier this month.

“I think removing the FDIC insurance cap is a good move,” Warren said in an interview with Face the Nation. “Now the question is, where is the correct number for cancellation? But realize that we have to do this because these banks are under-regulated, and by raising the cap we are demanding – or even more relying on regulators – to do their jobs.”

The Democratic senator said the key question for Congress is where to set the insurance limit for FDIC deposits.

“Is it $2 million? Is it $5 million? Is it $10 million?” She said. “Small businesses need to be confident that they’re getting money to pay their payroll and utility bills. Nonprofit organizations need to be able to do this. These are not people who can examine the safety and soundness of their individual banks. That’s the job of regulators.”

Sen. Elizabeth Warren on Face the Nation, March 19, 2023.

Warren declined to say whether she is talking to the White House about a plan to raise FDIC insurance levels above the $250,000 cap, but said, “That’s one of the options that needs to be on the table right now.” “

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The abrupt shutdown of Silicon Valley Bank on March 10, followed by the collapse of Signature Bank of New York days later, prompted federal bank regulators to devise a plan to shore up the banking system and reassure Americans that they can have confidence in the financial system.

As part of the Biden administration’s emergency measures, it was intended to ensure that all depositors with accounts at Silicon Valley Bank have access to all of their money. The Federal Reserve also established a new lending facility to help financial institutions meet depositors’ needs.

But the collapse of the two banks has brought renewed scrutiny from top banking regulators, including Federal Reserve Chair Jerome Powell.

Warren said Sunday that regulators and executives at those banks should be held accountable, specifically criticizing the Fed and Powell, who she says is a “dangerous man in this position.”

“We need accountability for our regulators who have clearly failed at the job, and that starts with Jerome Powell, and we need accountability for the executives of these big financial institutions,” Warren said. “Look, there should be recoveries for Gary Becker and the others who are blowing up these banks.”

The Massachusetts senator also said she had no confidence in Mary Daly, the chair of the San Francisco Fed, because public disclosures back in December showed there were problems with the Silicon Valley bank.

“The Fed should have acted, but the San Francisco Fed and the Federal Reserve Bank did,” she said. “Remember that the Federal Reserve Bank and Jerome Powell are ultimately responsible for the oversight and supervision of these banks. And they have made it clear that it is their job to relax regulations on these banks. We have now seen the consequences.”

Warren said Powell “needs to turn around 180 degrees and put these banks under closer scrutiny,” and Congress is tightening banking regulations.

“This whole group of banks has been under-regulated for five years. And people are very concerned about what’s under the hood because regulators are clearly not in control of their job,” she said. “That’s why right now I’m calling for changes from the Fed in their regulatory approach and changes in Congress so that we reverse approval to relax those regulations.”

Warren separately on Sunday required conducted an independent investigation into the bank’s and regulators’ failures and required the Inspectors General of the Treasury Department, the FDIC and the Federal Reserve to submit a preliminary report to Congress within 30 days.

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