Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is a by the Glass-Steagall Act of 1933 Called into being Deposit Protection Fund of the United States . The Washington, DC- based public company is headed by Martin J. Gruenberg.
history
In order to ensure the stability of the banking system and to avoid bank runs , the Federal Reserve System was created in the USA . In the Great Depression , the safety mechanisms created were not enough, more and there was a large number of bank failures that destroyed the savings of millions. In 1933 the banking system was reorganized by the "Glass-Steagall Act". In addition to the introduction of the separate banking system , the introduction of the FDIC was a central means of restoring trust in the banks.
In May 1933 the FDIC insured up to 70 percent of the deposits amounting to 10,000 US dollars (USD) (approx. 197,000 USD in today's purchasing power). At the end of the 1970s, the sum insured was increased to 100 percent as part of the savings and loan crisis . In total, more than $ 150 billion in compensation was paid out by the FDIC in this crisis.
In July 2008, the FDIC stepped in to rescue IndyMac Bank, which had run into trouble from the 2007 financial crisis .
validation
Until October 3, 2008, the FDIC secured 100 percent of the loss of deposits per bank and customer up to an upper limit of USD 100,000, after which the upper limit rose (initially temporarily) to USD 250,000. Bank securities, custody accounts or locker contents are not hedged; Damage from incorrect bookings, theft and fraud are also not covered .
The banks bear the costs of the protection through an allocation. This levy depends on the amount of the deposits, the levy rate on the risk of the bank. Depending on their equity base, the banks are divided into 5 classes with different contribution rates.
From the 2008 financial crisis
In September 2008, the amount of the deposits in the insurance fund of the FDIC, the Deposit Insurance Funds (DIF), amounted to about 45 billion dollar. By August 2009, however, that sum melted to $ 10.4 billion. However, further collapses of regional and supraregional banks resulted in additional losses, the total of the debts accumulated by 157 banks by 2010 amounted to 92 billion dollars.
According to the Dodd – Frank Act 2010, the “ Department for Complex Financial Institutions ” was founded to examine “ systemically important financial institutions” —that is, very large— financial institutions separately for their risk of becoming insolvent.
Web links
- www.fdic.gov - Official website
- A Brief History of Deposit Insurance in the United States ( English ) (PDF, 315 kB)
Individual evidence
- ↑ 20th Chairman of the FDIC [1]
- ↑ IndyMac to reopen 'strong and safe,' new boss says , CNN website. Retrieved April 30, 2014.
- ↑ Changes in FDIC Deposit Insurance Coverage ( Memento of the original dated November 22, 2010 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. , FDIC website. Retrieved April 30, 2014.
- ↑ Handelsblatt: FDIC hopes for help from financial investors
- ^ FDIC list of insolvent US banks since October 2000
- ^ FDIC Creates Office of Complex Financial Institutions - dodd-frank.com. Retrieved April 30, 2014.
