The FDIC provides deposit insurance up to $250,000 per account, ensuring customers do not lose their deposits if a bank fails. It's funded by banks through insurance premiums and part of its role is to examine banks' balance sheets to establish risk levels.
The function of the Federal Deposit Insurance Corporation (FDIC) is to protect depositors in case a bank fails. It does this by providing deposit insurance, which guarantees that depositors will receive up to $250,000 of their money in each account, even if the bank goes bankrupt. The FDIC is funded by insurance premiums paid by banks.
One key aspect of the FDIC's function is its role in examining banks' balance sheets to determine risk level. Bank examiners from the FDIC evaluate the asset and liability values. This process helps to verify the soundness of insured banks, contributing to financial stability in the banking sector.
It's important to note that the FDIC does not cover securities investments, and it does not have a mandate to protect consumer rights or notify depositors when a bank closes. Its sole purpose is to provide deposit insurance to ensure that bank customers do not lose their deposits if a bank fails.