What does "FDIC" stand for?

The correct answer is "Federal Deposit Insurance Corporation." The FDIC is an independent agency of the federal government that was created in 1933 in response to thousands of bank failures in the 1920s and 1930s. Its main purpose is to maintain public confidence and encourage stability in the financial system by protecting depositors. It does this by providing insurance to depositors in member banks, thus guaranteeing the safety of deposits up to a specified limit (currently $250,000 per depositor, per insured bank). This insurance helps prevent bank runs, where customers withdraw their funds simultaneously due to fears of bank insolvency.

The other choices, while they contain similar terms, do not accurately represent the agency's name or function. The second option refers to a fictitious council that does not exist. The third option misidentifies "Financial" and "Insurance," leading to confusion with the primary focus of the FDIC. Lastly, the fourth option incorrectly describes the organization's purpose and name, as it misrepresents its focus on deposit insurance. Understanding the FDIC's role is crucial for anyone studying banking and finance, as it plays a significant part in safeguarding consumers and maintaining a stable banking environment.