Assigned blog #2

THe BAnking act of 1935

The Federal Deposit Insurance Corporation (FDIC) was initially established by the Banking
Act of 1933 (P.L. 73-66, 48 Stat. 162) in response to the depression era closure of banks.
Two years later, in the 1935 Banking Act, the FDIC was made a permanent agency of the federal government.
Additionally, this Act modified the Federal Reseve Act by replacing the Federal Reserve Board with a seven member Board of Governors and disqualified the Comptroller of the Currency and the Secretary of the Treasury from membership. It authorized the Board to set reserve requirements for member banks on time and savings deposits, and restructured the Federal Open Market Committee (FMOC) which then became an extension of the Federal Reserve Board, along with five district representatives. ( they changed the fedral reserve act by placing new members on the board and giving them control to set requirement over everything

Key points:

Permanent establishment of the FDIC and a funding stream for the insurance fund.
A newly established Federal Reserve Board of Governors

Why is it still relevant?

The Insurance fund and FDIC guidelines for safe and sound operations continue to bolster public confidence in the U.S. banking system.

Priming the pump

or pump priming (pŭmp'prī'mĭng) n.Government action taken to stimulate the economy, as spending money in the commercial sector, cutting taxes, or reducing interest rates.

Read more: http://www.answers.com/topic/pump-priming#ixzz1Bu0rwez9

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