What does the acronym 'FDIC' stand for?

What does the acronym 'FDIC' stand for?

• A. Federal Deposit Insurance Corporation
• B. Financial Deposit Investment Company
• C. Federal Development Insurance Commission
• D. Financial Department of International Commerce

Answer: (A)

The acronym 'FDIC' stands for the Federal Deposit Insurance Corporation. This U.S. government agency was established in 1933 in response to the thousands of bank failures during the Great Depression. Its main purpose is to protect depositors by providing insurance on deposits, which guarantees that depositors will recover their funds up to a certain limit even if the bank fails. This assurance helps to maintain consumer confidence in the financial system and contributes to the overall stability of financial institutions. The significance of the FDIC lies in its role in promoting safe banking practices and ensuring that banks adhere to regulations designed to protect consumers. In this way, the FDIC not only safeguards individual depositors but also helps to avert larger banking crises, making it a crucial component of the American banking system.

The acronym 'FDIC' stands for the Federal Deposit Insurance Corporation. This U.S. government agency was established in 1933 in response to the thousands of bank failures during the Great Depression. Its main purpose is to protect depositors by providing insurance on deposits, which guarantees that depositors will recover their funds up to a certain limit even if the bank fails. This assurance helps to maintain consumer confidence in the financial system and contributes to the overall stability of financial institutions.

The significance of the FDIC lies in its role in promoting safe banking practices and ensuring that banks adhere to regulations designed to protect consumers. In this way, the FDIC not only safeguards individual depositors but also helps to avert larger banking crises, making it a crucial component of the American banking system.