“One of the questions is going to be, did the Federal Reserve Bank make the best of the bad choices that were available to them,” said House Financial Services member Bryan Steil, R-Wis. “There was no good choice for the Federal Reserve to make. Did they make the best of the bad options they had in front of them?”
Reed said it’s important to send the message that future bank failures may not be handled the same way.
“We have to reflect on what steps we can take to send the message, again, that there’s a limit on deposit insurance,” Reed said in an interview. “The presumption should be that there is a limit, and we should reinforce that fact and also have the banking industry reinforce it to their customers.”
Others have called for a review of the FDIC $250,000 limit on deposits, particularly for small businesses that deposit cash to cover day-to-day operations. Congress last raised the cap from $100,000 to $250,000 after the 2008 financial crisis.
Sen. Mitt Romney, R-Utah, was among those who said Congress should revisit the cap. If bank customers, particularly small businesses, fear deposits aren’t safe in small community or midsize regional banks, they’ll move their money to a handful of big banks, he said.
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