What Happens When an FDIC-Insured Bank Fails?

Federal Deposit Insurance Corporation is an independent financial institution of the United States Federal Government. Responsible for handling deposit insurance business. The company was established under the Banking Act of 1933. Beginning January 1, 1934, all member banks of the Federal Reserve System and state banks that apply for federal reserve insurance and meet the conditions will implement a deposit insurance system with statutory limits. The company's funds come from insurance premiums paid by the insured bank every year based on 1/3000 of its total deposits and interest earned on investment in government bonds, and it has the right to borrow from the Ministry of Finance no more than $ 3 billion at any time. ^[1]

Federal Deposit Insurance Corporation

Federal Deposit Insurance Corporation is an independent financial institution of the United States Federal Government. Responsible for handling deposit insurance business. The company was established under the Banking Act of 1933. Beginning January 1, 1934, all member banks of the Federal Reserve System and state banks that apply for federal reserve insurance and meet the conditions will implement a deposit insurance system with statutory limits. The company's funds come from insurance premiums paid by the insured bank every year based on 1/3000 of its total deposits and interest earned on investment in government bonds, and it has the right to borrow from the Ministry of Finance no more than $ 3 billion at any time. ^[1]

The FDIC was established in 1933 and began providing deposit insurance on January 1, 1934. FDIC is headquartered in Washington and has branches in Atlanta, Chicago, Dallas, Kansas, New York, Boston, and San Francisco. As of the end of 2007,

The FDIC maintains and enhances public confidence in the country's financial system by providing insurance for deposits by banks and savings institutions, identifying and monitoring risks in deposit insurance funds, and limiting the impact of banks and savings institutions on the economic and financial systems when they fail.

Deposit insurance

The FDIC provides insurance for deposits at banks and savings institutions. As an insurance institution, the FDIC must continuously evaluate and effectively manage the impact of changes in the economy, financial markets, and banking system on the adequacy and volatility of deposit insurance funds. The FDIC's insurance funds total more than $ 50 billion and provide insurance for more than $ 4 trillion in deposits in U.S. banks and savings institutions. Different types of deposits (such as single or joint accounts) can be insured separately. In addition,

The FDIC is an independent federal government agency established by the US Congress, but does not require Congressional funding. Its sources of funding are insurance premiums paid by banks and savings institutions for deposit insurance, and the proceeds of investment in US Treasuries.

The governing body of the FDIC is a five-member board of directors, all of whom are appointed by the president and determined by the Senate, and no more than three people must be from the same political party. The board of directors meets once a month. The agency consists of the Supervision and Consumer Protection Department, the Insurance and Research Department, the Bankruptcy Management Department, the Information Technology Department, the Finance Department, the Administrative Management Department, and the Enterprise Risk Management Office, the Economic Situation Office, the International Affairs Office, the Legal Affairs Office, the Disciplinary Inspection office. The FDIC publishes budgets, strategic plans and financial reports on an annual or quarterly basis.

4. FDIC's Deposit Insurance Fund

In February 2006, according to the Federal Deposit Insurance Reform Act (2005), the FDIC merged the original Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) into a new fund, deposit insurance. Fund (DIF), effective March 31, 2006. DIF is used to pay for insured deposits in failed institutions. As of December 31, 2007, DIF's total assets were $ 53 billion. For the full year 2007, DIF's comprehensive income was $ 2.2 billion.