1: Deposit Insurance
Insured depositors are protected from loss without recourse to taxpayer funding. Other Information:
Program Description: Deposit insurance is a fundamental part of the FDIC’s commitment to maintain stability and public confidence
in the U.S. financial system. Promoting industry and consumer awareness of deposit insurance helps the FDIC protect depositors
at banks and savings associations of all sizes. When insured depository institutions fail, the FDIC ensures that financial
institution customers have timely access to their insured deposits and other services. To keep pace with the evolving banking
industry and maintain its readiness to promptly protect insured depositors, the FDIC prepares and maintains contingency plans
to address a variety of insured depository institution failures. The deposit insurance funds must remain viable so that adequate
funds are available to protect insured depositors in the event of an institution’s failure. The FDIC maintains sufficient
deposit insurance fund balances by collecting risk-based insurance premiums from insured depository institutions and through
prudent fund investment strategies. The FDIC continually evaluates the adequacy of the deposit insurance funds. It identifies
risks to the insurance funds by analyzing regional, national, and global economic, financial, and financial institution developments,
and by collecting and evaluating information through the supervisory process. The FDIC is engaged in a comprehensive review
of the deposit insurance system. Statutory requirements constrain the FDIC’s ability to charge institutions for the risk they
pose to the insurance funds and require potentially high deposit insurance premiums during downturns, when institutions can
least afford to pay. In addition, the existing process for adjusting coverage levels to keep pace with inflation is not automatic,
unlike other important government programs for which the benefits are indexed to well-understood benchmarks.
Objective(s):
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