Will the FDIC's move to cover uninsured deposits set a risky precedent?
Some say the decision to guarantee deposits beyond the typical $250,000 limit was necessary to keep the financial system stable. Others argue this sets a bad precedent if other banks run into trouble.
For years, the FDIC has insured up to $250,000 of deposits that anyone has stashed away at a federally protected bank. Anything beyond that is not guaranteed to be protected should a financial institution go belly up.
But over the weekend, following the spectacular collapse of Silicon Valley Bank and Signature Bank, the FDIC made an exception to that rule and is now in the process of paying back all customers of the two failed banks in full — no matter the size of their deposits.
The move has renewed in the banking
