Federal Deposit Insurance Corporation

The Federal Deposit Insurance Corporation ( FDIC ) is one of the Glass- Steagall Act of 1933, the called into life the Deposit Protection Fund of the United States.

History

To ensure the stability of the banking system and to avoid " Bank Runs", the Federal Reserve System was created in the United States. In the world economic crisis, the security mechanisms put in place were not sufficient and there was a large number of bank failures, which wiped out the savings of millions. 1933, the banking system through the " Glass-Steagall Act " was rearranged. In addition to the introduction of the two-tier banking system, especially the introduction of the FDIC was a central means to restore confidence in the banks.

In May 1933, the FDIC guaranteed deposits up to 70 % of deposits in the amount of $ 10,000 ( in today's purchasing power approximately $ 187,000 ) from. The late 1970s, the coverage was raised as part of the Savings -and -loan crisis to 100%. In total more than 150 billion USD were paid to compensation in this crisis by the FDIC.

In July 2008, the FDIC stepped in to save the result of the financial crisis in difficulty from 2007 IndyMac Bank.

Safeguarding

Until 31 December 2009, the FDIC guaranteed 100 % of the loss of deposits per bank and the customer up to a limit of $ 250,000, then the ceiling fell ( with the exception of retirement funds, IRA) back to the previous value of $ 100,000 from. Not covered are securities of the bank, account balances or locker contents.

Also not covered are damage resulting from incorrect entries, theft and fraud.

The cost of hedging wear the banks of a levy. This allocation depends on the amount of deposits, the levy rate from the risk of the bank. Depending on the equity base, banks are divided into 5 classes with different contribution rates.

In September 2008, the amount of deposits in the insurance fund of the FDIC (DIF ) was around 45 billion USD. However, by August 2009, this sum dwindled to $ 10.4 billion. Further breakdowns of regional and national banks maintained since then apply to additional losses. Right now ( 2009) is all the money, and it goes further into the negative.