Incredibly, Congress is considering raising the current deposit insurance ceiling for banks from $100,000 to $130,000 for individual bank deposits and to $260,000 for certain types of retirement accounts. This move should be stopped. The last time Washington hiked the limit (in 1980, from $40,000 to $100,000), it helped fuel the catastrophic savings and loan collapse. A mini-industry grew from brokers who sold high-yielding bank CDs. Customers did not care about these institutions' financial soundness; after all, Uncle Sam was guaranteeing the deposits. These banks, particularly the S&Ls, went on a lending binge. Small banks say they need higher insurance...
