Sunday, March 11, 2012

The Federal Deposit Insurance Corporation (FDIC)

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, up to $250,000 per depositor per bank as of January 2012. As of November 18, 2010 (2010 -11-18), the FDIC insured deposits at 7,723 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).

Insured institutions are required to place signs at their place of business stating that "deposits are backed by the full faith and credit of the United States Government." Since the start of FDIC insurance on January 1, 1934, no depositor has lost any insured funds as a result of a failure.

At Q4 2010 there were 884 banks having very low capital cushions against risk. It was nearly 12 percent of all federally insured banks, the highest level in 18 years

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