Unintended Consequences and Deposit Insurance

I’m working on a longer piece about the unintended consequences of current policy — e.g., ballooning deposit insurance allowing small banks and others to end-run the Treasury bailout via CDARS — so you can see why this new OECD chart struck me. There has been an incredible sea-change in the world of global deposit insurance, and the consequences, while not entirely knowable, will also not be what regulators currently expect.

deposit-insurance

Comments

  1. Actually – US could be higher – I had one large bank send me a flyer describing how they could protect more the $250k since they actually owned multiple other banks. They would split it up for you across their other entities ensuring each had less than the limit. Of course if I had that kind of I wouldn't give it to them – I would give it to my good friend Bernie,,, oops strike that