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US Government: All Bank Deposits Over $250K Aren’t Insured Unless Systemic Risk Determined

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Less than five years ago, then-U.S. Federal Reserve Chair Janet Yellen said she doubted there would be another financial crisis as long as she lives, thanks to reforms in the banking system since the Great Financial Crisis of 2008-2009.A run on Silicon Valley Bank, which funded tech startups, led to its collapse on March 10 in the country’s second-largest bank failure. Two days later, Signature Bank in New York City also failed.Now Treasury Secretary Yellen, President Joe Biden and the Federal Reserve and Federal Deposit Insurance Corp boards invoked “systemic risk exceptions” after the banks failed, which allowed them to protect uninsured deposits, including those of wealthy tech and crypto executives and investors. Translated: if you are rich and well connected, you are systematically important.If you don’t know if you are systemically important — you are not.— Brixton77 (@Brixton771) March 16, 2023 The banking crisis raised fears that larger financial institutions would be strengthened at the expense of smaller ones, Business Insider reported.Facing criticism, Yellen on Tuesday promised to safeguard deposits at smaller banks, saying that the Treasury and regulators were prepared to intervene if further deposit runs threaten more banking contagion, Reuters reported.Deposit insurance, created during the Great Depression,...