Kate Judge and Peter Conti-Brown on the Lessons Learned from the 2023 Banking Panic
Macro Musings with David Beckworth
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The Banking Crisis of 2023 Can Be Our Moment to Differentiate Between Wealthy People Who Have a Quarter Million Dollars in a Single Bank Account
Banks cannot compete against each other if all of their deposit liabilities are guaranteed by the same source. The proposal I would make is we should actually do something we've never done in history before since 1933 and that is lower the deposit insurance limit for individuals. And then for simplicity, increase it by an order of magnitude for companies with fewer than 100 employees. Maybe the banking crisis of 2023 can be our moment to differentiate between wealthy people who have a quarter million dollars in liquid assets that they want guaranteed by the government and small corporations that might have the same amount but need more protection.
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