What best describes why the Federal Deposit Insurance Corporation was created?

Federal Deposit Insurance Corporation (FDIC), independent U.S. government corporation created under authority of the Banking Act of 1933 (also known as the Glass-Steagall Act), with the responsibility to insure bank deposits in eligible banks against loss in the event of a bank failure and to regulate certain banking practices. It was established after the collapse of many American banks during the initial years of the Great Depression. Although earlier state-sponsored plans to insure depositors had not succeeded, the FDIC became a permanent government agency through the Banking Act of 1935.

The FDIC’s income is derived from assessments on insured banks and from investments. Insured banks are assessed on the basis of their average deposits; they are currently allowed pro-rata credits totaling two-thirds of the annual assessments after deductions for losses and corporation expenses. The corporation is authorized to insure bank deposits in eligible banks up to a specified maximum amount that has been adjusted through the years. Having begun in 1934 with deposit insurance of $5,000 per account, in 1980 the FDIC raised that amount to $100,000 for each deposit. The limit was later temporarily (2008) and then permanently (2010) raised to $250,000.

From 1933, all members of the Federal Reserve System were required to insure their deposits, while nonmember banks—about half the United States total—were allowed to do so if they met FDIC standards. Almost all incorporated commercial banks in the United States participate in the plan. The FDIC is managed by a board of five directors who are appointed by the U.S. president; the five board positions are chairman, vice chairman, director, comptroller of the currency, and director of the Office of Thrift Supervision.

independent government corporation created in 1933 (after the disastrous collapse of the banking system) with the duty to insure bank deposits in eligible banks against loss in the event of a bank failure and to regulate certain banking practices. The FDIC's income is derived from assessments on insured banks and from interest on the required investment of its surplus funds in government securities. It also has authority to borrow up to $100 billion from the U.S. Treasury. The corporation insures bank deposits in eligible banks, and some savings and loan institutions, up to the statutory limit ($250,000, since the financial crisis of 2008, now made permanent). It also acts as receiver for all national banks placed in receivership and for designated state banks; performs periodic audits of banks for insurance purposes; approves or disapproves mergers, consolidations, and acquisitions in certain cases; issues cease-and-desist orders when it detects violations of approved practices; and performs other duties related to ensuring public confidence in banks and protecting the money supply.

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Which of the following describes the purpose of the Federal Deposit Insurance Corporation?

Which statement best describes the federal deposit insurance?

Which of the following describes a responsibility of FDIC?