INTER WAR YEARS 1919 TO 1939
THE GREAT DEPRESSION
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To protect depositors’ money in banks
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To protect investors from stock losses
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To protect people from foreclosures and evictions
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To provide money for soup kitchens
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Detailed explanation-1: -In some countries, deposit insurance has been institutionalized as protection to depositors’ funds with the banks. Such corporation provides insurance cover to the depositors against chances of loss of their deposits in the event of bank failure.
Detailed explanation-2: -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-3: -Federal deposit insurance became effective on January 1, 1934, providing depositors with $2, 500 in coverage, and by any measure it was an immediate success in restoring public confidence and stability to the banking system. Only nine banks failed in 1934, compared to more than 9, 000 in the preceding four years.
Detailed explanation-4: -The FDIC protects depositors of insured banks located in the United States against the loss of their deposits if an insured bank fails. Any person or entity can have FDIC insurance coverage in an insured bank.
Detailed explanation-5: -The FDIC, or Federal Deposit Insurance Corporation, is an agency created in 1933 during the depths of the Great Depression to protect bank depositors and ensure a level of trust in the American banking system.