Federal DepositInsurance Corporation

Before 1933,andparticularly during the period 1929—1933,bank failures were notuncom-mon.________(51)a bank overextended itself in creating credit or ifseveral of its

important loanscould not be________(52),depositors in the bank would frequently become panickyand begin to make large withdrawals.________(53)the bank had only a

small number of itsdeposits backed by currency,the bank would soon be unable to meetwithdrawals,and most depositors ________(54)their money.Most frequently a bank

merely needed timeto improve its cash posi- tion by________(55)some of its loans and not makingadditional ones.In 1933,the number of bank failures________(56)a

peak,forcing thefederal government to intervene and ________(57)the banks temporarily.To helprestore the public's confidence________(58) banks and strengthen the

bankingcommunity,Congress passed legislation setting up the Federal Deposit InsuranceCorporation.________(59)corporation,an agency of the federal government, now

insures over 90percent of all mutual savings and commercial bank deposits for________(60)$100,000 per deposit.The FDIC has________(61)its insurance fund by charging

member in-stitutionsone-twelfth of 1 percent of their total deposits.

As a result of theprotection provided by the FDIC and through other kinds of supervision, bankfailures have been________(62)to a few isolated instances .When deposits

are federallyinsured,people________(63)rush to withdraw their money if they________(64)thefinancial condition of their bank .The delay gives the banks the necessary

time to adjust theircash credit balance,and this action helps to reduce the________(65)ofbankruptcy.

57._________

A..closed

B. closing

C. close

D. has closed