Federal officials appear to be investigating ways to improve deposit safety in order to prevent a financial disaster.
According to Bloomberg News, Treasury Department officials are looking at whether regulators have the authority to temporarily guarantee deposits in excess of the customary $250,000 limit without Congressional approval.
According to the story, which cites sources familiar with the issue, officials do not believe such a measure is essential but are devising a plan in case the financial crisis worsens.
The banking sector is experiencing difficulties as a result of the bankruptcy of Silicon Valley Bank earlier this month, followed by the failure of Signature Bank.
“There has been substantial interest from a number of parties, and the FDIC and bidders require further time to evaluate all options in order to maximise value and establish an optimum solution,” the FDIC said in a news release Monday.
One of the probable buyers is First Citizens Bank, which has taken over 20 bankruptcies in the preceding 14 years.
Bloomberg reports that one option being considered for the proposed expanded FDIC insurance plan is leveraging the Treasury Department’s capacity to take emergency action and draw from the Exchange Stabilization Fund.
