Question

What was the important goal of The Federal Deposit Insurance Corp (FDIC), which was an integral part of The Banking Act of 1933?

• A. To prevent massive bank failure such as what was experienced between 1929 and 1932.
• B. To encourage Americans to refrain from using their savings to invest in the stock market.
• C. To offer cheap mortgage insurance to struggling Americans.
• D. To increase bank reserves in order to banks to lend credit to American businesses.
• E. To convince skeptical Americans about the safety of depositing their money in re-opened banks.

Answer 1

The correct option is A To prevent massive bank failure such as what was experienced between 1929 and 1932.

The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation providing deposit insurance to depositors in US banks. The FDIC was created by the 1933 Banking Act after the Great Depression to restore trust in the American banking system; more than one-third of banks failed in the years before the FDIC's creation, and bank runs were common.