How the FDIC , Was Created to Deal With , Banking Crises.<br />NPR reports that the collapse of Silicon Valley Bank <br />has brought the FDIC into the spotlight 90 years <br />after its creation to avoid a banking catastrophe.<br />The agency's goal is to minimize panic <br />and turbulence following the second-largest <br />bank failure in the history of the U.S. .<br />The FDIC is working to convince U.S. citizens and <br />businesses that the banking system is safe while <br />avoiding bank runs that threaten to deepen the crisis.<br />The FDIC was formed in 1933 after <br />approximately 4,000 banks had closed <br />in the first few months of the year.<br />The FDIC was formed in 1933 after <br />approximately 4,000 banks had closed <br />in the first few months of the year.<br />I can assure you, my friends, <br />that it is safer to keep your money <br />in a reopened bank than it is <br />to keep it under the mattress, President Franklin D. Roosevelt, <br />March 12, 1933 Fireside Chat, via NPR.<br />I can assure you, my friends, <br />that it is safer to keep your money <br />in a reopened bank than it is <br />to keep it under the mattress, President Franklin D. Roosevelt, <br />March 12, 1933 Fireside Chat, via NPR.<br />The FDIC is an independent government agency that <br />is funded by banks and savings associations who pay <br />insurance premiums to cover trillions of dollars in deposits.<br />So we charge the bank 12 cents for every <br />$100 you put in the bank as insured money. <br />That allows us to build up our insurance <br />fund to pay costs when we have problems <br />like bank closings, where we have to<br />then pay people their money back, John Bovenzi, Former FDIC chief operating officer, via NPR.<br />So we charge the bank 12 cents for every <br />$100 you put in the bank as insured money. <br />That allows us to build up our insurance <br />fund to pay costs when we have problems <br />like bank closings, where we have to<br />then pay people their money back, John Bovenzi, Former FDIC chief operating officer, via NPR.<br />NPR reports that deposit insurance, which is covered <br />by insurance premiums, is one of the main tools the FDIC <br />is relying upon to guarantee that accounts are safe. .<br />However, deposit insurance does not <br />apply to stocks, bonds, mutual funds <br />and other investment instruments.<br />NPR reports that critics of the FDIC <br />have cited the dangers of the agency <br />encouraging risky behaviors.
