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Deposit insurance was initiated in the 1930s to help restore confidence in the banking system after thousands of banks failed and millions of dollars in deposits were lost during the Great Depression. In 1990, the federal government insured about $3 trillion in deposits in the nation1s banks, thrifts, and credit unions and has to date fulfilled its goal of maintaining the stability of the banking system. This report discusses issues associated with reforming the deposit insurance system, specifically changes to the system that will promote a safe, sound, and stable banking industry. Charts and tables.
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