Federal Deposit Insurance Corporation (FDIC)

Examples of Federal Deposit Insurance Corporation (FDIC) in the following topics:

• The Federal Deposit Insurance Corporation (FDIC)

  • The Federal Deposit Insurance Corporation is an independent agency whose mandate is to maintain stability and public confidence in financial system.
  • The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system by insuring deposits, examining and supervising financial institutions for safety and soundness and consumer protection, and managing receiverships.
  • The FDIC insures more than $7 trillion of deposits in U.S. banks and thrifts—deposits in virtually every bank and thrift in the country .
  • Banks and credit unions are required to comply with regulations.The Federal Deposit Insurance Corporation (FDIC) insures deposit accounts for banks and the National Credit Union Administration for credit unions.
  • The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by the Congress to maintain stability and public confidence in the nation's financial system.

• Websites

• Chapter Questions

  • Why would people deposit their savings into financial intermediaries, instead of directly investing in the financial markets?
  • Explain the role of the Federal Deposits Insurance Corporation (FDIC).
  • Identify the two methods the FDIC uses to handle a bank failure.
  • Distinguish between a money-market mutual fund and a money-market deposit account.

• Online Direct Banks

  • Based in Atlanta, it was the first direct bank to be insured by the Federal Deposit Insurance Corporation (FDIC).

• The Glass Steagall Banking Act

  • The Glass-Steagall Act also created the Federal Deposit Insurance Corporation (FDIC).
  • The FDIC, a public corporation, insures the deposits of each depositor in commercial banks up to$250,000.
  • Although federal law prohibited banks from crossing state lines and opening banks in another state, the federal government did not hesitate to violate its own rules when it needed to.
  • The FDIC charges insurance premiums based on the total amount of deposits at the bank and the risk level the depository institutions pose to the FDIC.
  • Then the FDIC requires banks to prepay their deposit insurance for 2010, 2011, and 2012.

• The United States Banking System

  • This office also grants charters on behalf of the U.S. federal government, and it requires national banks to be members of the Federal Reserve and Federal Deposit Insurance Corporation.
  • Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks.
  • As of 2009, the FDIC had 8,195 member banks.
  • Moreover, the FDIC insures deposits at savings institutions.
  • This agency also insures the deposits at credit unions while the FDIC does not.

• Banking and Finance Reform

  • It provided for a system of reopening sound banks under Treasury supervision, with federal loans available if needed.
  • Three-quarters of the banks in the Federal Reserve System reopened within the next three days.
  • Their deposits totalled $3.6 billion; depositors lost a total of $540 million, and eventually received on average 85 cents on the dollar for their deposits.
  • The act also established the Federal Deposit Insurance Corporation (FDIC), which insured deposits for up to $2,500, ending the risk of runs on banks.
  • This measure enabled the Federal Reserve to increase the amount of money in circulation to the level the economy needed.

• The Savings Association Insurance Fund (SAIF)

  • Between 1989 and 2006, there were two separate FDIC funds–Bank Insurance Fund (BIF), and Savings Association Insurance Fund (SAIF).
  • Between 1989 and 2006, there were two separate FDIC funds—the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF).
  • Bush signed into law the Federal Deposit Insurance Reform Act of 2005 (FDIRA),which contained changes to implement deposit insurance reform, as well as a number of study and survey requirements.
  • Between 1989 and 2006, there were two separate FDIC funds—the Bank Insurance Fund (BIF), and the Savings Association Insurance Fund (SAIF).
  • Explain why the Bank Insurance Fund and the Savings Association Insurance Fund were merged into the Deposit Insurance Fund

• The National Credit Union Administration (NCUA)

  • NCUA also insures savings in federal- and most state-chartered credit unions across the country through the National Credit Union Share Insurance Fund (NCUSIF), a federal fund backed by the full faith and credit of the United States government.
  • Responsibility for regulation would shift over the years as the agency migrated from the Federal Deposit Insurance Corporation to the Federal Security Agency, then to the Department of Health, Education, and Welfare.
  • As the insurer and regulator of federally chartered credit unions, the NCUA oversees credit union safety and soundness, much like the FDIC.
  • The National Credit Union Share Insurance Fund (NCUSIF) is the federal fund created by Congress in 1970 to insure member's deposits in federally insured credit unions.
  • All deposit insurance resources reflect this higher level of coverage.

• Answers to Chapter 2 Questions

  • Stocks are ownership of a corporation, while bonds are a loan to a corporation.
  • Treasury bills (T-bills), commercial paper, banker's acceptances, negotiable bank certificates of deposit (CDs), repurchase agreements, Federal Funds, and Eurodollars.
  • A state bank has a charter from a state government, while a federal bank has a charter from the U.S. federal government.
  • The FDIC insures bank deposits up to $250,000 per person and not by the account.
  • The FDIC liquidates a bank's assets and refunds the deposits to the depositors, or the FDIC finds another bank to merge with the failed bank.