Federal Reserve Chairman Powell delivered the Ending "Too Big to Fail" keynote speech at the International Bankers Association's 2013 Washington Conference. In his first speech as a member of the Federal Reserve Board of Governors, he discussed how to deal with bank runs. In January 1991, the third largest bank failure in U.S. history occurred. The financial system and the overall economy were under tremendous pressure. 45 banks were closed and 300,000 accounts were affected.
The problem faced at that time was that either the Federal Deposit Insurance Corporation of the United States protected all bank depositors regardless of deposit insurance limits, or it might face a more severe panic run. In the end, the Fed made a decision: ignore the maximum insurance amount and protect the entire amount in each account.
