How did the creation of the FDIC change the nature of banking in the United Stateside

Question

Guest

History

27 November, 01:19

How did the creation of the FDIC change the nature of banking in the United Stateside

+3

Answers (1)

Know the Answer?

Emma Yates · Answer 1

FDIC provided stability to the economy and the failing banking system.

Explanation:

FDIC is an insurance corporation started by the Federal Reserve. The Great Depression's effect by the stock market crash in 1912 existed until the Federal Reserve started this FDIC. The stock market crash resulted in the termination of many banks.

People started to run towards the banks to get their money back. FDIC was started by President Franklin D Rosevelt. It was created to cover the deposited amounts in the banks by the depositors. It provided stability for the country's economy and also the failing banks.

Also, prevented the banks and people from the bank failing panics. This led the banks to increase the lending money without a proportionate rise in the loan losses. That, in turn, resulted in a significant rise in the banks' assets.