THE GREAT DEPRESSION 1929 1940
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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buying stock on margin
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robbing banks
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runs on banks
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selling short
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Detailed explanation-1: -The FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships.
Detailed explanation-2: -In the 1920s and early 1930s, a rise in bank failures created a national crisis, wiping out many Americans’ savings. Since FDIC insurance began in 1934, no depositor has lost a single penny of insured funds due to bank failure.
Detailed explanation-3: -The role of deposit insurance is to stabilize the financial system in the event of bank failures by assuring depositors they will have immediate access to their insured funds even if their bank fails, thereby reducing their incentive to make a “run” on the bank.
Detailed explanation-4: -The National Banking Act of 1933 created the Federal Deposit Insurance Corporation (FDIC), under the Federal Deposit Insurance Act, to provide insurance for all banks.