Why is the relationship between the FDIC and the Fed?

Question

Responses

The Fed helps the FDIC insure banks.

The FDIC prints the money that the Fed issues.

The FDIC can challenge the interest rates the Fed sets.

The Fed limits how much the FDIC can invest in banks.

Answer 1

The correct response regarding the relationship between the FDIC (Federal Deposit Insurance Corporation) and the Fed (Federal Reserve) is:

The Fed helps the FDIC insure banks.

The Federal Reserve and the FDIC have distinct roles but work collaboratively to ensure the stability and safety of the banking system. The FDIC is primarily responsible for protecting depositors by providing insurance for deposits at member banks, while the Federal Reserve oversees monetary policy and serves as a bank for banks. They coordinate on issues related to banking regulation, supervision, and financial stability.