Expanding deposit insurance is Robin Hood in reverse

Proposals are now circulating in Washington to increase deposit insurance limits radically, including the bill from Sens. Bill Hagerty (R-TN) and Angela Alsobrooks (D-MD) to boost coverage from $250,000 to $10 million for certain accounts. This represents a highly regressive policy and a troubling break from the deregulatory policy agenda of President Donald Trump .

At first glance, the idea might sound like “protection for Main Street.” However, it’s the exact opposite — a payment from poorer depositors to richer ones. About 99% of deposits are covered by the existing coverage, so if protecting Main Street is the objective, we are already done. The remaining 1% of deposits are from sophisticated parties with large accounts. Protecting them will necessarily raise deposit insurance p