Republican Rep. Blaine Luetkemeyer of Missouri believes that the U.S. government should temporarily offer blanket insurance for all bank deposits in a bid to prevent massive flows of funds from smaller banks to larger institutions amid widespread panic surrounding the financial system.

"If you don’t do this, there's going to be a run on your smaller banks," Luetkemeyer said, according to Politico, "Everyone's going to take their money out and run to the JPMorgan’s and these too-big-to-fail banks, and they're going to get bigger and everybody else is going to get smaller and weaker, and it's going really be bad for our system."

Silicon Valley Bank and Signature Bank both collapsed recently, but while depositors who held funds at those institutions are being bailed out and will therefore not incur losses, the bank failures have sparked fears of contagion and further financial havoc.

"The thought process here is that this is a contagion that could be spread across the entire banking system if it's not contained and if people don't stop and and be calm about their assessment of the situation," the lawmaker said, according to the outlet. "This is a Chicken Little situation. You know, the sky is falling. Everybody runs around like that, the whole thing's going to implode."

Luetkemeyer, who has served in the U.S. House of Representatives for over a decade, suggested taking action by declaring that "for another 12 months here or six months, we're going to guarantee you every single deposit in this country and every bank until we get this interest rate situation resolved and these banks get back on solid footing." Politico reported that the lawmaker later altered his stance on the potential timeframe, with a spokesperson indicating that the guarantee could last "perhaps 30 to 60 days."

According to the outlet, the lawmaker claimed that "the system is sound" and "in better shape than it’s been in probably 20 years," though he also said that "we do have a few problems in it that need to be worked out."

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