One change he would like to see added to the bill in order to ease pressure on commercial banks and S&Ls is lifting the $100,000 per individual limit on deposit insurance, a move that could ease worries of depositors whose bank holdings ar greater than the cap. According to the Federal Deposit Insurance Corp., $2.5 billion of the $7 billion in banking deposits are uninsured. "The current insurance limit of $100,000 was set 28 years ago and has not been adjusted for inflation," Obama said in a statement Tuesday. Raising the FDIC limit to $250,000 "would boost small businesses, make our banking system more secure and help restore public confidence in our financial system."
Already the banking regulators have begun raising the cap indirectly, well beyond even $250,000 in some cases. In recently arranged takeovers of failing banks, they have gone out of their way to ensure that all depositors are covered. It's a smart move given that large uninsured depositors have fled weak institutions, further putting the banks' viability in question.
- Bill McConnell
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Democratic presidential nominee Barak Obama, reacting to the defeat Monday of the $700 billion financial bailout plan, is urging Congress to try again.
Other issues aside, Obama is going to have to sell the idea that a bailout is good for America as a whole.
There was vast public opposition to the previous bailout attempt and if there is vast public opposition to the next bailout and Obama attaches his name to it, much of that opposition would rub on him.