FDIC Wants To Raise Deposit Insurance Limit
RENEE MONTAGNE, host:
And in another move to calm jitters over the financial system, the administration and Congress are working on a plan to boost the amount of money in bank deposits that the government will insure. The guarantee of up to $100,000 by the Federal Deposit Insurance Corporation, or FDIC, helps many Americans sleep at night. It might also help the bailout plan pass Congress. The talk is of boosting the amount that the government will insure from 100,000 to 250,000 dollars. NPR's Yuki Noguchi has more.
YUKI NOGUCHI: The FDIC was created during the Great Depression as a way of preventing runs on failing banks. Donald Powell is a former chairman.
Mr. DONALD POWELL (Former Chairman, FDIC): I think Americans have two thoughts when they get up in the morning. One is, is my money safe? And two is, if I need money, can I borrow money? This speaks to number one.
NOGUCHI: The proposal is intended to reduce anxiety among bank customers and among small businesses.
Mr. POWELL: The downside of it is again the government is more at risk.
NOGUCHI: That doesn't bother William Seedman who chaired the FDIC in the late 1980s.
Mr. WILLIAM SEEDMAN (Former Chairman, FDIC): I proposed that at least ten years ago. I thought that based on the inflation rate, the changes in the way the banks were getting bigger, and so forth, that it would be a great help to depositors and to small banks.
NOGUCHI: Key leaders of both parties in Congress are said to support the measure, as do both presidential candidates. Yuki Noguchi, NPR News.