Interesting comments -

I'm in the same boat as mD as starting tomorrow 10/01 I officially join the ranks of the retired. I'll have to begin liquidating my corporate-based portfolio since I'll no longer be able to buy stocks at a discounted rate. Fortunately, I'm spread across several financial institutes in order to maximize the FDIC coverage.

But increasing the coverage also increases expense of banks to fund the FDIC which is $0.10-$0.15 for every $100 deposited based on the current $100K cap. Bumping the limit up to $250K will invariably add to the premium.

When banks fail, and they will continue to do so, the banks that survive now be paying an increased premium because of 1) the additional limit, and 2) to replenish the fund lost through the insurance of failed banks.

Will increasing the FDIC limit stop banks from failing? Nope. It's simply a post-failure remedy and does nothing to proactively prevent the failure from happening.

What is does create is an even bigger bill to pay when banks fail.

Let's give credit where credit is due. This discussion about the FDIC limits has been circulating since the beginning of the year and was one of the ideas tossed around when Bush was packaging his Economic Stimulus proposals. There was an article in the NYT examining such a proposal. Both Obama and McCain both jumped on the bandwagon - Obama just happened to get to a microphone first.