The FDIC is like money in the bank, only better. The Federal Insurance Corporation (FDIC) insures deposits and retirement accounts in member accounts for up to $250,000, protecting depositors in the event of bank failure. It also supervises financial institutions and manages failed banks. The FDIC is funded by member bank premiums for deposit insurance coverage and from earnings on investments in US Treasury securities. It insures more than $9 trillion of deposits, covering virtually every bank in the country. (It does not cover mutual funds, securities, or related investments.) An independent federal agency, the FDIC was created in 1933 in response to bank runs during the Great Depression.
The FDIC is funded by premiums that member banks pay for deposit insurance coverage and from earnings on investments in US Treasury securities. The agency insures more than $9 trillion of deposits, covering virtually every bank in the country. The FDIC does not cover mutual funds, securities, or related investments.
The agency has six regional offices and three temporary satellite offices across the country, in addition to its headquarters in Washington, DC. Funded by premiums paid by member banks, the FDIC is managed by a five-person board of directors, all of whom are appointed by the US President and confirmed by the Senate.
Since FDIC insurance was introduced on January 1, 1934, not a single cent of insured funds has been lost as a result of a bank failure.
From 2010 to 2011, the FDIC's total revenue increased by 22%, and its net income surged by 45%. The agency was helped by a $3.6 billion decrease in the provision for insurance losses and $2.6 billion in revenue from certain fees previously held as systemic risk deferred revenue.
The FDIC divides its corporate operating budget and expenses into two components: ongoing operations and receivership funding. Receivership funding represents expenses resulting from financial institution failures and is, therefore, largely driven by external forces. On the other hand, ongoing operations accounts for all other operating expenses and tends to be more controllable and estimable. The agency's corporate operating expenses totaled $2.82 billion in 2011, including $1.55 billion in ongoing operations and $1.27 billion in receivership funding. For 2012 the board of directors approved a corporate operating budget of $3.28 billion, consisting of $1.78 billion for ongoing operations and $1.50 billion for receivership funding.
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