Yellen: Not Considering Broad Deposit Insurance Increase

The transcript discusses the process and considerations involved in handling bank failures in the U.S. It highlights the role of congressional approval for banks over $250,000 and the systemic risk exception that allows the FDIC to protect all depositors. The decision to invoke this exception is made on a case-by-case basis, involving the FDIC board, the Fed board, and consultation with the president. The transcript clarifies that blanket insurance or guarantees are not currently being considered.

What is currently not being considered for banks with deposits over $250,000?

• Expansion of bank branches

• Congressional approval

• Increased interest rates

• New tax regulations

Who is involved in the decision-making process when a bank failure is judged?

• Only the FDIC board

• The local government

• The FDIC board, the Fed board, and the Treasury Secretary

• The president alone

What is the systemic risk exception related to?

• Expanding bank services

• Increasing bank profits

• Protecting all depositors

• Reducing bank taxes

What is the main concern when a bank failure is deemed to create systemic risk?

• Decrease in stock prices

• Increase in loan defaults

• A contagious bank run

• Loss of bank profits

What has not been considered or discussed according to the final section?

• Bank mergers

• Interest rate hikes

• New banking regulations

• Blanket insurance or guarantees for depositors