Ranking Member Waters Delivers Opening Statement at Deposit Insurance Roundtable: "…The Current Deposit Insurance System Should Be Strengthened So Regulators Don't Have to Rely on Emergency Authorities in the Future."
Ranking Member Waters Delivers Opening Statement at Deposit Insurance Roundtable: "...The Current Deposit Insurance System Should Be Strengthened So Regulators Don't Have to Rely on Emergency Authorities in the Future."
Good afternoon, thank you for joining our Democratic Financial Services Committee Member Roundtable on deposit insurance reform. Before I begin, I would like to remind Members and our panel that today's roundtable is being live streamed and recorded."
The
Before discussing deposit insurance reform, I would note that Committee Democrats have been offering sensible, targeted solutions to promote the safety and soundness of our banking system. We introduced our first wave of bills this week - eleven in all, including three of my own - to strengthen accountability for bank executives and bank risk management, among other reforms. I am pleased that the
I hope
From the moment we learned of
I, and my Democratic colleagues, were on the phone with the
I was pleased when the
But this marks the third episode in the last 15 years when the government acted to protect depositors beyond the traditional deposit insurance program that covers individual deposits up to
The first episode happened during the 2008 financial crisis, when the systemic risk exception was used several times, most notably to establish the
And the second episode was during the pandemic. Specifically, in the CARES Act,
Based on this history, the current deposit insurance system should be strengthened so regulators don't have to rely on emergency authorities in the future.
Further, the recent bank failures have reignited concerns regarding an implicit guarantee wherein only deposits at larger banks will reliably be safe in the event of a failure. This has contributed to a flight of deposits from smaller banks to bigger ones, raising concerns about the future of our nation's community banks.
I commend FDIC Chair
* raising the
* unlimited deposit insurance for everyone; and
* covering business payment accounts, like the payroll accounts of startup companies that were initially locked up when SVB failed.
These options for reform each have pros and cons for
After I introduce the panel, I will invite each of them to share about 3 to 4 minutes of opening comments, and then we will open it up to Member questions.
First, we will hear from
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