The UK, so far has said it will cover £50,000. What does that say about the UK governments confidence in the banking system?… Not much.

Desperate times call for desperate measures. The insured amount can always be reduced when the system calms down.

In my humble opinion this is nothing more than good, attack the government, tv time. Just like the “death tax” which only affects less than 5% of the country.

If everybody pulled out of stocks and bonds, to “wait it out,” they’d most definitely put most of their money in one of the few remaining mega banks. They’d then have scads of cash with which to make loans.

Liquidity crisis? Not any more.

The fact is that we’ve seen the periodic run on the bank during this crisis and a higher limit would have helped that from happening. Yes, the costs should be passed along to the banks, who will, in turn, pass it along to us in the form of lower interest rates paid on savings and higher debt costs. But I am happy to accept this minor cost increase even though I don’t have $100K in cash lying in a bank somewhere.

Finally, we must be careful when not indexing amounts for inflation. The AMT is one example of something that became grossly distorted over time.

Also, as someone else suggested, you could have different limits for personal accounts versus business accounts. I know small businesses have to distribute their cash across more than one account/bank. While this may seem like a simple thing to do, from an operational point of view, it’s cumbersome and inefficent.