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The Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corportation was created by the Banking Act of 1933 to regulate banking practices and to confirm bank deposits were in banks against loss in the case it were to fail. (Bovenzi, 122) The establishment was during the collapse of banks at the start of the Great Depression. (Brinkley, 629) It began with $5,000 of insurance money per account. By doing this, it would promote and preserve the public in the banks in this time of crisis. (Britannica)

 

The FDIC had many rights including that to make loans out and purchase assets from "depository institutions." (Encyclopedia.com) It played the role of protecting and reforming the financial security of the United States in the long run as we still see it resolving institution failures, but the one most used is to sell deposits and loans of the failed institution to another institution. Customers of the failed institution automatically become customers of the assuming institution. Most of the time, the transition is coherent from the customer's point of view. (Britannica) Peter Atwater is the perfect example of one who opposed it . He had helped build JP Morgan’s securitization business during the late 1980s and early 1990s, wanting to eliminate the FDIC. Atwater thinks doing so will promote bank stability, by removing the industry’s security blanket and encouraging it to be more responsible. As long as the FDIC is around, “depositor due diligence is non-existent.”Meanwhile, Amar Bhide, the Thomas Schmidheiny Professor at the Fletcher School of Law and Diplomacy, wants the government to remove the $250,000 limit on FDIC insurance, so that banks can insure deposits made by corporations and wealthy investors. (Allgov) The FDIC is therefore managed by a board of five directors who are appointed by the U.S. president; the five board positions are chairman, vice chairman, director, controller of the currency, and director of the Office of Thrift Supervision. (Britannica)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Works Cited

"Federal Deposit Insurance Corporation (FDIC)". Encyclopædia Britannica. Encyclopædia Britannica Online.

Bovenzi, John F. Inside the FDIC: Thirty Years of Bank Failures, Bailouts, and Regulatory Battles. N.p.: n.p., n.d. Print.

Digital image. FDIC. N.p., n.d. Web.

"Federal Deposit Insurance Corporation." Encyclopedia.com. The Gale Group,Inc, 2005. Web.

FDIC. Digital image. Pinterest. N.p., n.d. Web.
 "AllGov - Departments." AllGov - Departments. N.p., n.d. Web. 10 Mar. 2016.

Digital image. FDIC+1900's+timeline - Google Search. N.p., n.d. Web. 10 Mar. 2016.

Brinkley, Alan. The Unfinished Nation: A Concise History of the American People. Boston: McGraw-Hill, 2004. Print.