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Regulation and Policy

Mid-Size Bank Coalition Requests Extension of Deposit Insurance Amidst Rising Bank Failure Concerns

Mid-Size Bank Coalition Requests Extension of Deposit Insurance Amidst Rising Bank Failure Concerns

The Mid-Size Bank Coalition of America (MBCA) has reportedly asked United States federal regulators to extend insurance on all deposits for the next two years.

In a letter to the U.S. Federal Deposit Insurance Corporation (FDIC), the MBCA stated that this action would “stabilize” the banking industry and significantly decrease the chances of “more bank failures.”

Banks urged to fund insurance program

The MBCA proposed that the banks themselves fund the insurance program by raising the deposit-insurance assessment on lenders who opt to participate in the increased coverage.

However, John Deaton, the founder of legal news outlet Crypto Law Lawyer, predicted in a tweet to his 250,000 followers that up to 300 banks could go under if the FDIC fails to provide “some guarantee.”

Economist warns of potential bank failures

This comes after a recent analysis by economists revealed that “almost 190 banks are at a potential risk” of impairment to insured depositors, with “potentially $300 billion of insured depositors at risk.”

The report also stated that “even if only half of uninsured depositors” decided to withdraw, many banks are at risk from uninsured deposit withdrawals.

READ MORE: Bitcoin Facing Significant Pressure Despite Recent Surge

Representative questions FDIC’s actions

Meanwhile, Representative Tom Emmer, the majority whip in the United States House of Representatives, questioned reports that the FDIC is “weaponizing recent instability” in the banking sector to “purge legal crypto activity” from the U.S.

In a letter to FDIC chair Martin Gruenberg, Emmer warned that these actions are “deeply inappropriate” and could lead to “broader financial instability.”

Federal Reserve to review Silicon Valley Bank’s supervision and regulation

In addition, the U.S. Federal Reserve announced that the vice chair for Supervision, Michael Barr, is “leading a review of the supervision and regulation” of Silicon Valley Bank in “light of its failure,” with the review set for public release by May 1.

Andrey Kunev

Reporter at CoinsPress

Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.

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