On Monday’s broadcast of CBS’ “Red & Blue,” House Financial Services Committee Ranking Member Rep. Maxine Waters (D-CA) acknowledged that banks could pass the cost of backstopping the depositors of Silicon Valley Bank (SVB) on to consumers, but there isn’t evidence they have yet.
Host Caitlin Huey-Burns asked, “The biggest question I think a lot of people have is that the government says that this won’t cost anything for taxpayers. But how is that possible? Couldn’t banks just pass this on to their consumers, who are also taxpayers, in some way?”
Waters answered, “Well, actually, we’re very fortunate that we have a federal insurance program that protects depositors up to [$250,000], but that is premiums that are paid in by the banks. And it is well-funded. And so, that’s where that money is coming from.”
Huey-Burns then asked, “But is there a way that these banks could somehow pass that on to the consumer?”
Waters responded, “Well, you know, you could think that way. When you think about businesses and you think about how they earn money, you could think that they could raise prices, etc. But we see no signs of that at this point, at all. The money was there. It’s in the insurance fund, it’s been paid for already, and we don’t see any way that that’s going to increase taxpayers at this time in any way.”
Follow Ian Hanchett on Twitter @IanHanchett
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