McKernan Underscores Problems with FDIC’s Systemic Risk Exception

Source: Cato Institute
by Norbert Michel

“In the last few weeks, federal officials have released a flurry of reports and statements related to the Silicon Valley Bank and Signature Bank failures. There’s no shortage of interesting information in those documents, but so far there’s only one that rises to the level of must‐​read. Hands down, that title goes to the May 11 statement released by Federal Deposit Insurance Corporation board member Jonathan McKernan. For starters, the statement provides little‐​reported background information on the systemic risk exception, the move that enabled the FDIC to cover uninsured depositors as SVB and Signature were failing. This information, by itself, should be enough to make Congress realize how badly it needs to fix the Federal Deposit Insurance Act.” (05/16/23)