The Federal – Corporation makes sure – get their money back if an insured bank fails. This agency was implemented during the – in response to the high number of bank failures. The peace of mind the FDIC provided depositors resulted in a decreased frequency of –. However, since banks and their customers are no longer fully exposed to risk, there is increased potential for –.

The Federal DEPOSIT INSURANCE Corporation makes sure DEPOSITORS get their money back if an insured bank fails. This agency was implemented during the GREAT DEPRESSION in response to the high number of bank failures. The peace of mind the FDIC provided depositors resulted in a decreased frequency of BANK RUNS. However, since banks and their customers are no longer fully exposed to risk, there is increased potential for MORAL HAZARD.

Explanation:

During the Great Depression which occurred during the year 1893-1933, there was a widespread panic in people about the stability of banks during that time. This led people to start withdrawing all their money from Banks in large amounts. This term was also know as Bank Runs.

Due to the wide occurrence of Bank Runs during the Great Depression, the stability of the United States economy was at stake and in other to stabilize the economy, the Federal Deposit Insurance Corporation was created.

FDIC also known as the Federal Deposit Insurance Corporation is an agency in the United States. It was created in the year 1933, on the 16th of June.

It was signed into law by President Franklin .D. Roosevelt. The president provided insurance on the deposits made by the people of the United States in some selected and eligible banks.

This corporation made sure the people of the United States got back their deposits if the insured banks failed.