The Federal Deposit Insurance Corporation (FDIC) was created by the Banking Act of 1933.
The Banking Act of 1933, enacted in the midst of the Great Depression, marked a turning point in the regulation and stability of the American banking system. Among its key provisions was the establishment of the Federal Deposit Insurance Corporation (FDIC), an independent agency tasked with protecting depositors' funds in the event of a bank failure.
The FDIC's creation was a direct response to the widespread bank failures that plagued the 1920s and early 1930s, eroding public confidence in the banking system and exacerbating the economic crisis. By guaranteeing deposits up to a certain amount, the FDIC aimed to restore trust in the banking system and safeguard depositors' hard-earned savings.
Since its inception, the FDIC has played a crucial role in maintaining financial stability in the United States. It has effectively prevented bank runs, which were once a common occurrence, and has helped to minimize the economic impact of bank failures. Today, the FDIC insures over 5,000 banks, covering nearly 98% of all U.S. deposit accounts.