ECONOMICS
FEDERAL RESERVE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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insure customers money against inflation
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insure customer deposits if a bank fails
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insure banks if a customer dosent make enough deposits
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allow customers to make deposits at federal banks
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Detailed explanation-1: -The United States was the first country to officially enact deposit insurance to protect depositors from losses by insolvent banks. In 1933, the Glass-Steagall Act established the Federal Deposit Insurance Corporation (FDIC) to insure deposits at commercial banks.
Detailed explanation-2: -If an FDIC-insured bank can’t resolve the issues that are putting it on the brink of collapse, the FDIC will step in and try to help sell its remaining assets to a healthy bank. But when there aren’t any willing buyers, the FDIC will take over the failing bank and pay its depositors up to the insured limit.
Detailed explanation-3: -Each depositor in a bank is insured upto a maximum of ₹ 5, 00, 000 (Rupees Five Lakhs) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank’s licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.
Detailed explanation-4: -FDIC insurance covers depositors’ accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank’s failure, up to the insurance limit.
Detailed explanation-5: -Deposit Insurance If a commercial bank fails, the FDIC guarantees to reimburse depositors up to $250, 000 (raised from $100, 000 during the financial crisis of 2008) per insured bank, for each account ownership category.