1) The fact is that @FDICgov #deposit #insurance is outdated. Don’t consider only the $250k or amount but underlying activities when assessing deposit insurance. It was designed for a Glass-Steagall world. Today, the #DIF should be priced relative to underlying business risk.
2) An old fashioned community bank that merely takes deposits and makes loans within its customer geography should be assessed at a different level than a bank that is also an asset manager, insurer, and investment bank.
3) #FDIC insurance should be priced based upon underlying activity AND business line risks. The DIF assessments for plain vanilla, old fashioned banks, should be essentially free up to a dollar amount that captures the deposit needs of their local customers.
4) Banks involved in non-traditional (more complex) activities should pay premiums that are risk weighted and the costs should be skewed towards disincentivizing risk.
5) eventually we would have some portion of small, relatively risk-less, banks that are just retail equivalent of corp treasury cash management accounts where customers can hold very short term cash equivalents & sweep to cash as needed. Those would have almost zero FDIC… twitter.com/i/web/status/1…
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