Franklin D. Roosevelt signed the 1933 law that created the Federal Deposit Insurance Corporation after the banking panic.
The Banking Act of 1933 became law on June 16, 1933, during Roosevelt's first term. It established the FDIC, which began insuring bank deposits later that year. Deposit insurance was intended to reduce the incentive for customers to rush to withdraw money when they feared a bank might fail.
The measure followed a severe banking crisis during the Great Depression. Thousands of U.S. banks had failed, destroying savings and weakening confidence in the financial system. The act also separated commercial and investment banking through provisions commonly associated with Glass-Steagall.
The FDIC did not prevent stock-market losses directly, and it was not created by the 1929 crash alone. Its immediate purpose was restoring confidence in commercial banks and protecting eligible deposits.