Statement of Lev Menand before the Democratic Member Roundtable on Deposit Insurance Reform

Recent events have made it clear that the deposit insurance system is broken. We have a de jure cap on insurance set at $250,000 but, de facto, for any bank with at least $100 billion in assets, uninsured depositors are very unlikely to take losses. It is time for Congress to advance legislation formally insuring all demandable deposits, while retaining the $250,000 cap for time deposits. Congress should also change how deposit insurance is assessed, adopting a progressive schedule and requiring banks to pay a fair rate in exchange for their deposit franchise