Deposit insurance is a safety net provided to protect depositors' funds in the event of a bank failure. This system maintains public confidence in the banking system by ensuring that depositors' money is safe up to a certain limit, even if their bank ceases operations. It is typically offered by a government agency or a privately-operated insurance fund.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions.
The Federal Savings and Loan Insurance Corporation (FSLIC) was a U.S. government agency established to insure depositors in savings and loan associations against loss of principal. It was founded in 1934 and disbanded in 1989, with its functions transferred to the Federal Deposit Insurance Corporation (FDIC).
The Glass-Steagall Act of 1933 is a legislative measure passed by Congress that authorizes deposit insurance and prohibits commercial banks from owning brokerage firms. This act was largely repealed by the Financial Services Modernization Act of 1999.
