If We Need More Deposit Insurance, Enlist Insurers: Chris Hughes

If the world needs more deposit insurance, there ought to be a system of guarantees where customers paid for higher cover, and taxpayers shared the underwriting burden with the insurance industry.

US authorities were unwilling to let SVB and Signature depositors take losses on sums above the $250,000 limit set by the Federal Deposit Insurance Corp. We don’t know if the UK would have done the same for the local SVB subsidiary above the country’s £85,000 threshold: A rescue by HSBC Holdings Plc made the question moot.

The existing ceilings are set so that the average retail depositor has confidence in the system. Those ...