Federal Deposit Insurance Corporation Flashcards, test questions and answers
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What is Federal Deposit Insurance Corporation?
The Federal Deposit Insurance Corporation (FDIC) is an independent government agency in the United States that insures deposits at banks and other financial institutions. Established in 1933, it is one of the oldest federal agencies and continues to play a major role in protecting consumers today. Through its insurance program, the FDIC safeguards funds deposited by consumers up to $250,000 per account. This helps to ensure that people do not lose their hard-earned money if their bank fails or encounters financial hardship.The FDIC also oversees how banks operate, which helps protect customers from fraud and other unethical practices. It monitors banking organizations for safety and soundness, assessing whether they meet legal requirements and maintain sufficient capital reserves to cover potential losses from loans or investments. The FDIC’s regulations help promote consumer confidence in our nation’s banking system by helping ensure that it remains stable and secure even during times of economic uncertainty or market volatility.When a bank fails, the FDIC steps in to protect customers’ deposits and minimize any losses they may incur as a result of the closing institution. In such cases, the agency works with other state or federal regulators to either merge failing banks into another financial institution or liquidate them depending on what will best serve depositors’ interests while ensuring that all customers receive their insured deposits back promptly without interruption. The FDIC has had a long history of providing stability to our nation’s banking system since 1933 when it was established during the Great Depression as part of President Franklin Roosevelt’s New Deal legislation. Today it continues its mission of providing protection for depositors against loss due to bank failure so people can have peace of mind when saving their money at financial institutions backed by this agency’s insurance program.