One Lead House Republican has officially called for the Biden administration to insure all bank deposits at all banks around the world for a time.
This past Tuesday, Congressman Blaine Luetkemeyer (R-MO) expressed that the government should now be backing up every single deposit in the banks for the time being in order to secure the confidence of the people in the financial system and to put a stop to bank runs. His statements were issued right in the middle of an ongoing controversy over the government’s choice to entirely ensure the deposits made to Silicon Valley Bank in the wake of its collapse this past week.
“If you don’t do this, there’s going to be a run on your smaller banks,” stated Luetkemeyer to POLITICO. “Everyone’s going to take their money out and run to the JPMorgan’s and these too-big-to-fail banks, and they’re going to get bigger and everybody else is going to get smaller and weaker, and it’s going really be bad for our system.”
Formerly working as a banker and a member of the House Financial Services Committee, Luetkemeyer sits as one of the few Republicans in the House to take the same line as the Biden administration when it comes to insuring deposits at SVB. Other Republicans within Congress — which includes Reps. Matt Gaetz (R-FL) and Lance Gooden (R-TX), and Senators Josh Hawley (R-MO), J.D. Vance (R-OH), Tom Cotton (R-AR), and Roger Marshall (R-KS), among a few others — have all stepped up to blast the policy from the Biden administration, labeling it as just a bailout for the large banks.
Luetkemeyer, however, seemed to disagree. “The thought process here is that this is a contagion that could be spread across the entire banking system if it’s not contained and if people don’t stop and be calm about their assessment of the situation,” he stated. “This is a Chicken Little situation. You know, the sky is falling. Everybody runs around like that, the whole thing’s going to implode.”
“So what you could do right now is that very same thing and say, hey, look, for another 12 months here or six months, we’re going to guarantee you every single deposit in this country and every bank until we get this interest rate situation resolved and these banks get back on solid footing,” he stated. He also went on to note that in the wake of the 2008 financial crisis, a temporary policy was set up by the FDIC which pushed the deposit insurance above the $250,000 limit.
The Republican would later back down a bit, stating in a release that the policy should, in reality, only last between 30 to 60 days.