Concept introduction:
Financial Intermediation- The productive economic activity in the financial market whereby an institutional unit engages in financial transactions in the market to acquire financial assets and in the process incurs liabilities in its own account. Transaction costs and economies of large scale, asymmetric information types like adverse selection (hidden information) and Moral Hazard (hidden action) are the rationales of financial intermediation.
FDIC- Federal Deposit Insurance Corporation (FDIC) is the US Corporation insuring the deposits in the country against bank failure to prevent the bank runs plaguing the economy since the Greta Depression. The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC insured bank per ownership category.
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