Mark Cuban highlighted the risks associated with limited coverage extended by the Federal Deposit Insurance Corporation or FDIC.
What Happened: The “Shark Tank” fame billionaire said in a Twitter interaction on Monday, “Effectively every employee of every non-federal government entity faces payroll risk because of the risk associated with limited FDIC insurance.”
Cuban clarified that he was not pitching for “free unlimited FDIC coverage” but rather “creating accounts that are fully insured, with the associated necessary premiums, or some equivalent, is a necessity.”
Why It Matters: Cuban’s comments came at a time when the US banking sector is under focus after the collapse of the Silicon Valley Bank run by SVB Financial Corp SIVB.
Silicon Valley Bank, which counts many startups or small tech companies as clients, was the biggest banking collapse since the 2008 financial crisis in the United States.
Meanwhile, the FDIC also transferred all deposits and substantial assets of Signature Bank SBNY to a full-service bank that the agency will operate. FDIC actions came in the wake of the failure of the lender.
The agency said that depositors of Signature Bank will be made whole and losses will not be borne by the taxpayers.
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