I DO THINK THE FDIC DID A
failed. But it’s really not the system we should have now. I do think the FDIC did a wonderful study of potential changes to insured deposit limits. Transaction
concentrations of power with the very, very largest institutions.
WONDERFUL STUDY OF POTENTIAL CHANGES TO INSURED DEPOSIT LIMITS. TRANSACTION ACCOUNTS WAS ONE AREA WHERE THE STUDY REALLY FOCUSED.
But if I want Truist to be able to compete with, say, JP Morgan Chase for some of Amazon’s business or Microsoft’s business, having a $10 million cap, even that high, on a transaction account isn’t going to help them. I do think if you require that they be low-yielding and true transaction accounts, that of itself will be self-limiting. And I do think that it’s time that maybe that should be seriously considered as a way to stabilize our system and make it more competitive and preserve that really important regional bank sector of our banking system that has been so important, especially to small to medium-sized business lending. I hope they do it sooner than later. I hope Congress reads that FDIC report. I hope they start taking this issue up, because as I said earlier, we’re going to have more bank failures, and that’s going to spook the uninsured again. If we don’t deal with this now, we’re going to have a lot more money running to the “too big to fail” institutions. That’s going to increase concentrations, further stress the mid- size banks, and I think that’s going to be very, very bad for our system and our U.S. economy.
accounts was one area where the study really focused. I do think they have unlimited guarantees in Japan for transaction accounts and I think in the U.S. it’s time to consider that. I don’t believe in universal deposit insurance, because I think then you just have hot money seeking yield going into really weak banks, and then you have a lot of other problems. Transaction accounts, - bona fide transaction accounts - don’t pay a lot of yield, they’re used by businesses, governments, municipalities, and non-profits to make payments, and I think it makes a lot of sense to give them unlimited guarantees because if a bank fails, cutting those deposits can hurt the real economy. It might impact making payroll and paying vendors. It’s important to keep those accounts functional if a bank fails. I do think some unlimited, maybe permanent unlimited guarantees for transaction accounts might be the right solution. I know that’s politically not very popular, but I got to tell you, if we want to create competition for the “too big to fail” banks, if we want to avoid a barbell system where we have really big banks and really little banks and nobody in the middle coming up and trying to provide any competition to those big banks, we’ve got even worse
Thank you.
2023 ANNUAL REPORT 15
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