Which factor is NOT a primary function of the FDIC?

The correct response identifies that setting interest rates is not a primary function of the Federal Deposit Insurance Corporation (FDIC). The FDIC’s main roles focus on ensuring the stability and security of the banking system in the United States through its core functions.

One of the primary responsibilities of the FDIC is insuring deposits. This means that the FDIC protects depositors by providing insurance coverage for deposits held in member banks, which helps to maintain public confidence in the U.S. financial system.

Another crucial function is supervising financial institutions. The FDIC monitors and regulates banks and savings associations to ensure they operate safely and soundly, comply with applicable laws, and protect the interests of depositors.

Additionally, the FDIC manages receiverships, which involves stepping in to take control of failed banks, manage their assets, and ensure a smooth transition for depositors and other stakeholders.

In contrast, setting interest rates is typically the responsibility of the Federal Reserve, not the FDIC. The Federal Reserve is the central banking system of the United States and conducts monetary policy, which includes setting benchmark interest rates to guide economic activity. This distinction clarifies the separate roles within the financial regulatory framework.