What does the Federal Deposit Insurance Corporation (FDIC) do?

The Federal Deposit Insurance Corporation (FDIC) plays a crucial role in maintaining public confidence in the U.S. financial system by providing insurance for bank deposits. This means that if a bank fails, the FDIC protects depositors by ensuring they receive their insured funds, up to a certain limit, even if the bank becomes insolvent. This insurance helps to prevent bank runs, where large numbers of customers withdraw their deposits simultaneously due to fears about a bank's solvency. By safeguarding individual savings, the FDIC contributes to the overall stability of the financial system and promotes trust in banking institutions.

The other options pertain to different government functions; for instance, regulating stock trading is tasked to the Securities and Exchange Commission (SEC), funding public schools is primarily a local and state responsibility, and agricultural subsidies fall under the purview of the Department of Agriculture.