Silicon Valley Bank closed
A locked door and closure notice at a Silicon Valley Bank branch on Sand Hill Road in Menlo Park, the epicenter of the U.S. venture capital sector. REUTERS/Jeffrey Dastin

State Treasurer Fiona Ma called on President Biden Monday to protect 100% of deposits at all U.S. banks until the panic sparked by the collapse of Silicon Valley Bank ends.

Ma said that if regulators had not quickly guaranteed the deposits at Silicon Valley Bank, California’s economy “could have taken a hit and seen significant layoffs.”

She said that protection should temporarily be extended to all banks until the crisis is over.

“I’m asking President Biden to continue to calm nerves by fully protecting 100% of business and individual account deposits with FDIC coverage until full confidence is restored in our banking system,” Ma said. “Banks of all sizes — large, regional, and community — should be included.

Ma’s proposal is at odds with the position of conservative Republicans in the House of Representatives, who called Monday for limiting deposit guarantees to $250,000 per account.

The Republican House Freedom Caucus said in a statement the Federal Reserve “must unwind” its extraordinary funding facility created on March 12 that allows banks to boost borrowing from the Federal Reserve to cover deposit outflows.

“Any universal guarantee on all bank deposits, whether implicit or explicit, enshrines a dangerous precedent that simply encourages future irresponsible behavior to be paid for by those not involved who followed the rules,” the group said.

Chris Jennewein is Editor & Publisher of Times of San Diego.