Final answer:
The Federal Reserve Bank and the Federal Deposit Insurance Corporation both aim to ensure stability and confidence in the U.S. financial system, with the FDIC insuring deposits and the Fed providing monetary policy and banking services.
Step-by-step explanation:
The purposes of the Federal Reserve Bank (the Fed) and the Federal Deposit Insurance Corporation (FDIC) are alike in that both institutions were created to ensure stability and public confidence in the U.S. financial system. The FDIC was established as a result of the bank failures during the Great Depression to insure depositor's funds (up to $250,000 per depositor, per insured bank), thereby increasing confidence in the banking system and ending bank runs. On the other hand, the Federal Reserve acts as the central bank of the United States, performing critical functions such as conducting monetary policy to promote financial system stability, providing banking services to commercial banks and other depository institutions, and serving as a lender of last resort to banks during times of financial distress.
Both the FDIC and the Federal Reserve play a role in protecting the banking system and ensuring that a stable financial environment is maintained. Banks pay an insurance premium to the FDIC based on the level and riskiness of their deposits, which covers the insurance to reassure depositors. Meanwhile, the Federal Reserve supports the banking infrastructure by offering services like reserve accounts for banks and processing checks, alongside its monetary policy role.