The Federal Deposit Insurance Corporation (FDIC) was initially established by the BankingAct 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. It further provided that the stock of the FDIC was to be purchased by the Secretary of the Treasury on behalf of the United States, and that the deposit insurance system was to be maintained through assessments directly on the insured institutions. 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.
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