I don't think we're in disagreement -- I support the actions of the FDIC, Treasury, and FRB on this issue. A few hours from now, hopefully we will not see runs

I don't think we're in disagreement -- I support the actions of the FDIC, Treasury, and FRB on this issue. A few hours from now, hopefully we will not see runs on other exposed institutions. The decision was made that if the Deposit Insurance Fund [1] was drained as a consequence of this new mandate to protect all depositors while collecting insurance premiums calibrated to the previous $250k limit, the government will backstop the FDIC ("full faith and credit"). Good. My contention is that the future of the DIF itself is murky -- I suspect that it's no longer necessary. If it were still relevant, then shouldn't FDIC dramatically increase insurance premiums going forward? Without getting into too much detail, I find that extremely unlikely because FDIC insurance expenses are already quite high. If FDIC won't increase premiums to the level necessary to fund the DIF properly at the new (unlimited) level of protection, Congress should eliminate the requirement for banks to carry this insurance. > While the DIF is backed by the full faith and credit of the United States government, it has two sources of funds: assessments (insurance premiums) on FDIC-insured institutions and interest earned on funds invested in U.S. government obligations. Revenue from assessments and interest on investments add to the DIF balance (or fund net worth), while losses (primarily from bank failures) and operating expenses reduce the balance. [1] https://www.fdic.gov/resources/deposit-insurance/deposit-insurance-fund/ https://www.fdic.gov/resources/deposit-insurance/deposit-ins...