At a discussion in Santa Clara on Saturday with nonprofit and business leaders, Congressman Ro Khanna announced he's crafting legislation that would require banks to pay higher premiums to the Federal Deposit Insurance Corporation (FDIC) to protect all account holders -- including those with funds higher than $250,000. The revenue would protect deposits in case of a collapse.
Khanna told San Jose Spotlight, "I think (this legislation) is promising if I can get a Republican to sign on. Right now you basically have large accounts acting as uninsured drivers. The government ends up covering them if they fail, but they're not paying for the insurance beyond $250,000, so we need to have some fees and some insurance."
Financial regulators abruptly closed Silicon Valley Bank on March 10 after uncertainty about its solvency led to a massive bank run. The bank's failure is the second largest in U.S. history and SVB reportedly held $209 billion in assets at the time of its collapse.
The closure sent a wave of panic among thousands of tech businesses, nonprofits and startups that questioned how they'd make payroll and keep their doors open without access to their funds.
The Federal Reserve Board said all depositors at Silicon Valley Bank could access their money the following Monday.
