FDIC---the Federal Deposit Insurance Corporation was put into service temporarily as part of the Glass-Steagall Legislation of 1933,
later to be made permanent by legislation passed in 1935. Its purpose is to insure customer deposits and thereby prevent panicky Great Depression-like bank runs.
After the dismantling of parts of the Glass-Steagall Act in 1999, the line separating commercial banking, insurance,
hedging, sovereigns (governments) consumers/taxpayers/citizens/investors/owners/stockholders and investment
banking has continued to get fuzzier and fuzzier. Yet, many different animals called “banks” continue to be insured by the FDIC, keeping the entire crew on the hook, and some argue investment banks should not carry FDIC insurance. On the other hand some “investment
banks” do take customer deposits. See also Volcker Rule.
later to be made permanent by legislation passed in 1935. Its purpose is to insure customer deposits and thereby prevent panicky Great Depression-like bank runs.
After the dismantling of parts of the Glass-Steagall Act in 1999, the line separating commercial banking, insurance,
hedging, sovereigns (governments) consumers/taxpayers/citizens/investors/owners/stockholders and investment
banking has continued to get fuzzier and fuzzier. Yet, many different animals called “banks” continue to be insured by the FDIC, keeping the entire crew on the hook, and some argue investment banks should not carry FDIC insurance. On the other hand some “investment
banks” do take customer deposits. See also Volcker Rule.