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Your Tuesday Evening Briefing Your Tuesday Evening Briefing
(3 days later)
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Good evening. Here’s the latest at the end of Tuesday.Good evening. Here’s the latest at the end of Tuesday.
1. Seeking to calm concerns, lawmakers are pushing to raise the cap on insured bank deposits.1. Seeking to calm concerns, lawmakers are pushing to raise the cap on insured bank deposits.
Members of Congress were in discussions to introduce bipartisan legislation as early as this week that would temporarily increase the insured deposit cap on certain accounts — like those used for activities such as payroll — to convince depositors to stop pulling their money out of small and midsize banks.Members of Congress were in discussions to introduce bipartisan legislation as early as this week that would temporarily increase the insured deposit cap on certain accounts — like those used for activities such as payroll — to convince depositors to stop pulling their money out of small and midsize banks.
It’s unclear how broad support would be for the proposal. Some Republicans have opposed lifting the cap, which could remove a disincentive for banks to take on risk. Others, including Senator Elizabeth Warren, have suggested removing the deposit cap altogether.It’s unclear how broad support would be for the proposal. Some Republicans have opposed lifting the cap, which could remove a disincentive for banks to take on risk. Others, including Senator Elizabeth Warren, have suggested removing the deposit cap altogether.
Treasury Secretary Janet Yellen also said that the stresses to the financial system constituted a “crisis” and that the Biden administration was ready to take steps to calm fears over the stability of U.S. banks.
Tomorrow, Jerome Powell, the chair of the Federal Reserve, is likely to face a grilling about why his institution failed to stop problems at Silicon Valley Bank. The central bank also faces a difficult decision over whether to raise interest rates. In Opinion, Paul Krugman explored the dilemma.