Question

How does the federal deposit insurance corporation (fdic), created in 1933, impact citizens today? a. it regulates the securities market and protects the public from fraud. b. it restricts imports and encourages the public to buy domestic goods. c. it maintains stability and public confidence in the financial system. d. it provides low-interest loans to institutions used by the public such as banks.

Answer 1

The FDIC, established in 1933, plays a key role in maintaining stability and public confidence in the United States financial system by insuring deposits up to $250,000 per depositor and supervising banks for safety and soundness.

Step-by-step explanation:

The Federal Deposit Insurance Corporation (FDIC) was established in 1933 during the Great Depression as a response to restore public confidence in the banking system. With its creation, the FDIC began insuring deposits, which currently covers up to $250,000 per depositor, per insured bank. This deposit insurance helps to maintain stability and public confidence in the financial system, thereby preventing bank runs and securing individual finances against bank failures.

The FDIC collects insurance premiums from banks and serves as a regulator that supervises and examines banks for safety and soundness. In times of financial uncertainty, such as during the 2008 Financial Crisis, the FDIC plays a critical role in protecting depositors and ensuring the resilience of the financial system. Its presence is a cornerstone of the banking sector, built on the importance of users' trust in their ability to retrieve their money from banks.