TL;DR - The FDIC is a federal agency that insures deposits in order to prevent bank runs that ensue from widespread panic.
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Tags - FDIC, banks, bank run, deposit, insurance, Great Depression
- What is the FDIC?
- The FDIC is an independent federal agency.
- In light of the Great Depression, the FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system.
- For member firms, the FDIC insures deposits up to $250,000.
- The primary purpose of the FDIC is to prevent bank runs.
Follow up links:
- History of FDIC, https://www.investopedia.com/articles/economics/09/fdic-history.asp