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 Raising FDIC Coverage - White House Press Briefing by Tony Fratto 10/2/08 — Thursday, October 02, 2008 —  MR. FRATOO: Jennifer.Q I'm trying to understand this deposit insurance increase. MR. FRATTO: Sure. Q One of the reasons obviously that the vote went the way it did on Monday was that folks were uncomfortable with the idea of so much government money into the private markets, into Wall Street, that whole line of concern. But I'm trying to understand how protecting deposits that are over $100,000, which is a lot of money -- not -- most regular people don't have $100,000 sitting around in any one account --how is that getting to the Main Street regular people -- MR. FRATTO: Sure. Actually, it's one of -- America's small businesses use their local banks in order to fund their operations. That's where they keep their money for day-to-day operations -- their funds for payroll, for example. And so they would have -- in fact, a great many of them would have far more than $100,000 in their accounts. And what a lot of small businesses have had to do across the country is to split up their accounts as they felt that maybe banks were threatened -- split up their accounts in numerous banks, which is incredibly inefficient; it's not a very efficient way to do business. And you're also noticing that small businesses were moving their funds from banks that were perceived to be weak to banks that were perceived to be strong, and so really not normal ways of doing business. Raising the cap allows them to have the confidence that they can keep those funds in their local bank. They don't have to move them around. And so it's a much bigger cushion. Q Okay. Congress | Legislation | FDIC | Press Briefing | Tony Fratto | White House Press Corps Labels: Congress, FDIC, Legislation, Press Briefing, Tony Fratto, White House Press Corps
Posted by White House Press Corps @ 4:32 PM
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