The FDIC stands for the Federal Deposit Insurance Corporation. It is an independent agency of the U.S. government that provides deposit insurance to protect depositors in case a bank fails. Here are the key points about the FDIC:
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Deposit Insurance: The FDIC insures deposits at member banks up to a limit of $250,000 per depositor, per insured bank, for each account ownership category (e.g., individual, joint, retirement accounts, etc.). This means that if a bank fails, customers will not lose their insured deposits.
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Bank Supervision and Regulation: The FDIC also regulates and supervises financial institutions to ensure they operate safely and soundly. It monitors banks for compliance with various financial laws and regulations.
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Resolution of Failed Banks: When a bank fails, the FDIC steps in to manage the bank's closure. It either sells the bank’s assets to another institution or pays out insured depositors.
The FDIC was created in 1933 in response to the banking crises during the Great Depression to restore public confidence in the U.S. banking system. It helps ensure the safety and stability of the financial system.