Could the US Really Guarantee All Bank Deposits?: QuickTake

A once-unthinkable measure is being floated in Washington’s corridors of power as a possible way to ease the strains suddenly bearing down on small and regional US banks. Normally, the Federal Deposit Insurance Corp. guarantees bank deposits up to $250,000, a limit high enough to make most bank customers sleep easily at night. But recent stresses in the banking industry have put a temporary increase of the cap, or scrapping it, on the table.

1. Why is there a limit on insured deposits?

The goal of federal insurance is to boost confidence in the US banking system without guaranteeing every ...