How the state could take control of the banking system

Technology and regulation are making the government’s role in finance explicit

Apr 12th 2023

America’s banking conflagration may have died down, but the clean-up continues. Small and midsized banks have lost about $260bn in deposits this year. The Federal Reserve continues to plug much of the gap, having lent nearly $150bn to banks via its emergency schemes. Next year the Fed must decide whether to prolong them. By May 1st the Federal Deposit Insurance Corporation (fdic) will produce a menu of options for Congress about how to reform or expand the backstop the regulator provides, which is currently capped at $250,000 per depositor. Many blame the limit for the run which brought down Silicon Valley Bank (svb).

This article appeared in the Finance & economics section of the print edition under the headline “Lassoed”