Answer to Question #143339 in Economics for Jade

Question

In light of repeated banking crises present one argument in favor of FDIC insurance for deposits in banks and thrifts and one argument against. 

Answer 1

The argument in favor is that the FDIC is an independent agency of the U.S. government that protects you against loss of deposit if your bank or thrift fails and is FDIC insured.

The argument against is that the FDIC does not insure all accounts. Insured accounts include negotiable orders of withdrawal (NOW), money market deposit accounts (MMDA), checking and savings accounts, and certificates of deposit (CD). FDIC insurance covers the principal and interest of an account, not exceeding the $250,000 limit.