How the FDIC , Was Created to Deal With , Banking Crises.
NPR reports that the collapse of Silicon Valley Bank
has brought the FDIC into the spotlight 90 years
after its creation to avoid a banking catastrophe.
The agency's goal is to minimize panic
and turbulence following the second-largest
bank failure in the history of the U.S. .
The FDIC is working to convince U.S. citizens and
businesses that the banking system is safe while
avoiding bank runs that threaten to deepen the crisis.
The FDIC was formed in 1933 after
approximately 4,000 banks had closed
in the first few months of the year.
The FDIC was formed in 1933 after
approximately 4,000 banks had closed
in the first few months of the year.
I can assure you, my friends,
that it is safer to keep your money
in a reopened bank than it is
to keep it under the mattress, President Franklin D. Roosevelt,
March 12, 1933 Fireside Chat, via NPR.
I can assure you, my friends,
that it is safer to keep your money
in a reopened bank than it is
to keep it under the mattress, President Franklin D. Roosevelt,
March 12, 1933 Fireside Chat, via NPR.
The FDIC is an independent government agency that
is funded by banks and savings associations who pay
insurance premiums to cover trillions of dollars in deposits.
So we charge the bank 12 cents for every
$100 you put in the bank as insured money.
That allows us to build up our insurance
fund to pay costs when we have problems
like bank closings, where we have to
then pay people their money back, John Bovenzi, Former FDIC chief operating officer, via NPR.
So we charge the bank 12 cents for every
$100 you put in the bank as insured money.
That allows us to build up our insurance
fund to pay costs when we have problems
like bank closings, where we have to
then pay people their money back, John Bovenzi, Former FDIC chief operating officer, via NPR.
NPR reports that deposit insurance, which is covered
by insurance premiums, is one of the main tools the FDIC
is relying upon to guarantee that accounts are safe. .
However, deposit insurance does not
apply to stocks, bonds, mutual funds
and other investment instruments.
NPR reports that critics of the FDIC
have cited the dangers of the agency
encouraging risky behaviors.