WASHINGTON – Massachusetts Sen. Elizabeth Warren said Sunday that a proposal by Congress to dismantle the Federal Deposit Insurance Corporation (FDIC) Insurance cap An option from its current $250,000 limit that “must be on the table now” as lawmakers debate how to respond to the rapid collapse of the two banks earlier this month.
“I think lifting the FDIC insurance cap is a good move,” Warren said in an interview with “Face the Nation.” “Now the question is where is the right number of withdrawals? But recognize that we have to do it, because these banks are not regulated, and if we lift the cap, we need to – or rely more on regulators to do their job.”
The Democratic senator said the key question for Congress to act on is where to set the insurance cap for FDIC deposits.
“Is it 2 million dollars? Is it 5 million dollars? Is it 10 million?” she said. “Small businesses have to rely on them getting money to make payroll, to pay utility bills. Nonprofits have to be able to do that. These are not people who can investigate the safety and soundness of their personal banks. That’s what regulators are supposed to do.”
Warren declined to say whether he is talking to the White House about plans to raise FDIC insurance levels above its $250,000 cap, but said “it’s one of the options on the table right now.”
sudden Silicon Valley Bank closed March 10, followed by The collapse of the Signature Bank of New York Days later, federal banking regulators were sent to shore up the banking system and reassure Americans they could trust the financial system.
As part of Emergency measures from the Biden administration It was to ensure that all depositors with accounts at Silicon Valley Bank would have access to all their funds. The Federal Reserve also established a new lending facility to help financial institutions meet the needs of depositors.
But the collapse of the two banks has put renewed scrutiny on top banking regulators, including Federal Reserve Chair Jerome Powell.
Warren said Sunday that regulators and the executives of these banks should be held accountable, and specifically criticized the Fed and Powell, who he said is “a dangerous person to be in this position.”
“We need accountability for the regulators who have obviously botched the job, and that starts with Jerome Powell, and we need accountability for the executives of these large financial institutions,” Warren said. “Look, Gary Baker and the others who blew up these banks should have claws.”
The Massachusetts senator also said he lacks confidence in San Francisco Fed President Mary Daly, after public disclosures in early December indicated there were problems with the Silicon Valley bank.
“The Fed should have acted, but the San Francisco Fed and the Federal Reserve Bank,” he said. “Remember the Federal Reserve Bank and Jerome Powell are ultimately responsible for overseeing and overseeing these banks. And they’ve made it clear that they think their job is to ease regulation on these banks. We’ve seen the results now.”
Warren said Powell should “turn 180 degrees and put these banks under more scrutiny,” and Congress tighten banking regulations.
“This whole part of the bank has been regulated for five years now. And when you lift the hood, people are very concerned about what’s under the hood, because the regulators have obviously not been on top of their job,” he said. “That’s why I’m calling now for changes to the Fed’s regulatory approach and for changes in Congress so that we return authorization to ease those regulations.”
Warren separately on Sunday called for an independent investigation into the bank and regulatory failures and requested the inspectors general of the Treasury, the FDIC and the Federal Reserve to provide a preliminary report to Congress within 30 days.