The current limit is the result of such action in 2008: https://archive.fdic.gov/view/fdic/3388

They went beyond it for several banks: To my knowledge, nobody lost money in the dozens of banks that the FDIC closed in the 2008 meltdown, despite several depositors being beyond the FDIC limits.

Did they even have that power in 2008? I remember they issued a statement about how they could have avoided losses for creditors, had they properly liquidated Lehman Brothers [1].

[1]: https://www.fdic.gov/regulations/reform/lehman.html

> Did they even have that power in 2008?

I don't remember tbh, but IndyMac (in July 08) was before Lehman (in Sept) so I think the answer is yes.

My impression has always been the limit has been designed to accommodate a "worse case scenario" where many, many banks need to be saved.

If it's only a handful, it's in the gov't interest to ensure that businesses and people don't loose their savings.

Not true. IndyMac customers got 50 cents on the dollar, even with the retroactive raising of the FDIC insurance limit to $250K.

> is there precedent for that?

Again, it would be better to have a comment from someone who banks for a living, but back in 2008 when the FDIC limit was $100K, ISTR Sheila Bair making a statement to that effect (IndyMac?). One large issue was that companies would regularly be above the limit in order to run their payrolls, and so got caught in a bad position. That started companies with other banks worrying about where they were parking money, contributing to a systemic issue.