(Schwab Center for Financial Research)
The Federal Deposit Insurance Corporation (FDIC) took control of the Pasadena-based IndyMac Bank, F.S.B., on Friday, July 11, 2008, leaving many depositors nervous during the weekend of July 12–13. Although bank failures are relatively rare events, prudence suggests evaluating the steps you can take in order to protect the assets you have in the banking system. Steering depositors away from panic and instilling public confidence in the banking system were reasons why Congress created the FDIC in 1933 as an independent agency of the United States. The FDIC insures deposits at 8,494 banks and savings associations and is backed by the full faith and credit of the U.S. government. When a bank fails (which has happened 127 times in the past 15 years), depositors can take some comfort in knowing federal law requires the FDIC to make payments as soon as possible.
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