The Feds believe that members of the FDIC are primarily responsible for providing the consumer protection that the banking system is mandated to provide. This is accomplished by regulating the institution’s risk-mitigation procedures, ensuring that the institution has adequate insurance and compliance with certain federal and state laws, as well as reporting their activities. In other words, the Feds are protecting the public from the risks of relying on these institutions. Click here www.federatedfinancial.com/faq/
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In fact, the Feds recognize that these institutions are part of our economy. Because of this, the Feds require that they be transparent about their activities, including the type of business they undertake and their financial and management systems and practices. In addition, the Feds have been encouraging all FDIC members to participate in the FDIC Insurance Swap. This swap is a voluntary agreement between the insured institutions and the Federal Reserve that allow them to reduce their risk. By doing so, they are able to obtain lower interest rates.
The Feds allow FDIC insured institutions to participate in this swap program if they meet certain requirements. For example, an insured institution must offer at least two different kinds of funds in an account that are not interrelated. Furthermore, each institution must offer at least one account that contains only cash. This account may also include securities that are collateralized by securities of an underlying institution that is a member of the FDIC.