A major purpose of the FDIC (Federal Deposit Insurance Corporation) during the 1930s was to A) limit government borrowing. B) break up banking monopolies. C) create jobs for the unemployed. D) strengthen consumer confidence in the banking system
Answers
Option D i.e strength consumer confidence in the banking system is the correct answer.
Federal Deposit Insurance Corporation was established by the Glass Steagall Act 1933. Its major purpose was protect the money of people in banks and thus strengthen consumer confidence in the banking system.
During the Great Depression the people became panic and rushed to banks to withdraw their money.On other hand banks had no money as they had invested in Stock Market which had been crushed. So as they depositors worried and created bank run, FDIC was established to insure savings, checking and other deposits.
As per the FDIC procedure, it is taking place with stability to the economy and the failing banking with proper system.
In addition to this, they are officially created based on the glass steagall Act of 1993.
This is however modelled after the deposit and thus carries out further approach on initialising the programs enacted in Massachusetts and so far guaranteed as specific amount for checking.