What s The FDIC

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Division of Depositor and Consumer Protection: These are the FDIC's police officers, so to speak. This division examines the enterprise practices and funding strategies of insured banks and determines whether they are sound or have potential for failure. The division's compliance examiners conduct research to make sure banks are following federal banking laws. Workers of this division go to particular person banks to make their assessments [source: FDIC]. In response to the 2010 Dodd-Frank Act, the FDIC created an Office of Complex Monetary Establishments (CFI) to police banks and other giant monetary institutions with property higher than $one hundred billion [source: FDIC].

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Check the call danger: A "call" means a bond could be redeemed (paid off) at any time when the issuer decides, even when it hasn't reached maturity. This typically occurs when interest charges fall as a result of it might probably save the issuer money. For traders, this means you run the risk of misplaced money, both in curiosity payments or capital. Most bonds, nonetheless, are non-callable [source: The Securities Business and Financial Markets Affiliation].