WASHINGTON — In another attempt to limit the exodus of capital from financial institutions, the Bush administration is considering a plan to insure all deposits at depository institutions.
The idea, which is only at the discussion stage, would follow the recent examples of Denmark, Germany and Ireland. The Wall Street Journal revealed that administration officials are considering the policy change but there is no set timetable when a decision may be made.
It is not clear whether the change would apply to individual as well as business accounts or whether it would include credit unions. Officials at the NCUA as well as CUNA and NAFCU said this morning they did not have information about the proposal beyond what had been reported.
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In the economic rescue bill passed by Congress last week, the amount of deposits insured was raised from $100,000 to $250,000 through 2009 at credit unions, banks and thrift institutions.
Lifting the change would have to be approved by the Treasury Department and the financial institution regulators such as NCUA, the FDIC and the Office of Thrift Supervision.
Those agencies can change the insurance levels if they believe there is "systemic risk" to the financial system, according to federal law.
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