The FDIC??????

Question

How was the FDIC first established?

FDIC= Federal Deposit insurance corporation

need sources?

Answer 1

The FDIC gives a summary history: http://www.fdic.gov/about/learn/symbol/index.html

Answer 2

During the Great Depression many people lost confidence in their banks and sought to withdraw their money from their accounts. At the same time many borrowers were not able to repay their loans. As a result, almost half of the banks in the United States closed. In response Congress passed the Banking Act of 1933, sometimes referred to as the Glass-Steagall Act. The legislation was named for Senator Carter Glass of Virginia and Congressman Henry Steagall of Alabama. One of the provisions was that a Federal Deposit Insurance Corporation (FDIC) would be established to guarantee individual bank deposits. The intent was to restore confidence in the banking system. The FDIC began operations in January of 1934, providing deposit insurance coverage up to $2,500. Later in the year the coverage was raised to $5,000.

Answer 3

It was part of the Banking Act of 1933, which was one of the many important measures of reform and relief that Congress passed during FDRs first hundred days in office.
The FDIC insures deposits, up to a fixed amount, for member banks of the Federal Reserve System.
In other words, when you deposit your money in a bank that has "Member FDIC" on the side of it, your money is guaranteed to a fixed amount so you can get it back if the bank, for whatever reasons, should fail.