Evidence receipt / recommendation
Published · transcript-backedSimon Johnson: recommendation
17 May 2023 Conversations with Tyler Simon Johnson on Banking, Technology, and Prosperity
“I think a very sensible version of that would insure business transaction accounts, or operational deposits, as FDIC calls them.”
Source trail
Everything needed to verify it.
- Speaker
- Simon Johnson
- Attribution
- Verified speaker
- Claim type
- recommendation
- Recorded
- 17 May 2023
- Publisher
- Conversations with Tyler
Transcript context
…Insured above $250,000, you mean? Exactly. Sorry. Actually, the Sheila Bair proposal was to insure all uninsured deposits. We could talk about that. I think a very sensible version of that would insure business transaction accounts, or operational deposits, as FDIC calls them. Basically, small-business working capital, payroll, the account from which they make payroll, and so on. I think those are a real issue at the moment. I think insuring all deposits is something you only do when you’re absolutely desperate. Hopefully, we won’t get to that. It seems to be that’s the world moving forward. If we insure all deposits but SVB, then they’re all insured. Then those banks will take a lot more risk, and the problem gets bigger, and you raise deposit insurance premia. More funds move outside the banking system to, say, money market funds, which are less regulated. Doesn’t it just postpone the problem and make it bigger?…
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