Rep. Josh Harder (D-CA) said on Wednesday’s episode of NBC’s “MTP Daily” that the FDIC’s decision to insure deposits at Silicon Valley Bank (SVB) above the $250,000 limit means “the genie is out of the bottle” and the limit on deposits must be “implicitly raised, but we need to make it explicit” and raised “pretty dramatically.”
Harder remarked, “I believe we will need to significantly increase those insurance levels. Banks will be required to foot the bill for this insurance, as they are the ones to blame. They should have a far larger stake in the outcome. I don’t want to live in a country where only a handful of banks control the majority of the financial sector. We must take a stand if we want local banks to survive and prosper. They have the finest grasp of life in rural areas like mine. And if you take a look at the clients of Silicon Valley Bank, you’ll see that they’re a veritable wellspring of inventiveness and entrepreneurship; they’re striving to find a cure for cancer and build semiconductor chips. I’d like to see the dynamism of these smaller banks continue even as we ensure that moving forward, regulation and monitoring must be increased.
At a later time, he elaborated, “I think that the genie is out of the bottle and I think that we’re going to have to modify the system moving ahead. That insurance deductible must be increased. You’re true that they have been mentioned in passing, but I think it’s important to bring it up again. And as I’ve stated previously, we need to make sure that the banks with the most at stake are the ones to foot the bill for those premiums, giving them the best incentive to prevent similar malfeasance in the future.