BREAKING (5pm Saturday): Midsize US Banks Ask FDIC to Insure All Deposits for Two Years

The announcement of the latest bank rescue plan, Bank Term Funding Program (BTFP), provides adequate funds to small and mid-sized banks to handle any emergency except a bank run.

Unfortunately Sec Yellen BOTCHED part of her statement before congress making it easy to infer small and mid-sized banks are unprotected. Video of her botched statement went nearly viral on social media and there is at least a tiny bit of evidence to suggest a bank run might started on small and mid-sized banks.

A coalition of midsized banks has decided it is better not to wait and see so they are asking for explicit guarantees now. I can’t blame them.
.
.

Midsize US Banks Ask FDIC to Insure All Deposits for Two Years

Financial system risks more bank runs without aid, group says
Deposits have been moving into firms seen as too big to fail

March 18, 2023 at 5:03 PM EDT
A coalition of midsize US banks asked federal regulators to extend FDIC insurance to all deposits for the next two years, arguing the guarantee is needed to avoid a wider run on the banks.

“Doing so will immediately halt the exodus of deposits from smaller banks, stabilize the banking sector and greatly reduce chances of more bank failures,” the Mid-Size Bank Coalition of America said in a letter to regulators seen by Bloomberg News.

The collapse this month of Silicon Valley Bank and Signature Bank prompted a flood of deposits out of regional lenders and into the nation’s largest banks, including JPMorgan Chase & Co. and Bank of America Corp. Customers spooked by the bank failures were taking refuge in firms seen as too big to fail.

https://www.bloomberg.com/news/articles/2023-03-18/midsize-us-banks-ask-fdic-to-insure-all-deposits-for-two-years

Here is one of the many tweets that relayed the botched part of Yellen’s comments.
The “tweeter” is fond of making scary claims. But 320,000 people have viewed his tweet since he posted it yesterday and his is just one of many accounts posting it.