US regulator sees merits in increasing backstop

WASHINGTON: A key US banking regulator laid out a range of options for reforming the federal deposit insurance system on Monday and concluded that significantly increasing the backstop for bank accounts used for business purposes was the “most promising”.

In the wake of March’s lightning-fast bank failures, expanding coverage for accounts used to cover payrolls, invoices and other large business transactions has emerged as the Federal Deposit Insurance Corp’s (FDIC) preferred route for balancing financial stability and depositor protection relative to its cost.