Investopedia

Net-Worth Certificate

Filed Under »
Dictionary Says

Definition of 'Net-Worth Certificate'

An instrument used by the FDIC starting in 1982 as part of an effort to save failing banks and thrifts by providing capital. When deposit-rate restrictions that had existed for decades were lifted, banks and thrifts found themselves having to pay out more in interest on deposits than they were earning from their long-term investments, such as 30-year fixed-rate mortgages and government bonds. Net-worth certificates gave the banks and thrifts time to resolve their problems.
Investopedia Says

Investopedia explains 'Net-Worth Certificate'

During the 2008 financial crisis, some people, including former FDIC chairman William Isaac, suggested reintroducing net-worth certificates to rescue struggling banks while using minimal government intervention.

Articles Of Interest

  1. Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  2. The History Of The FDIC

    Find out why this corporation was developed and how it protects depositors from bank failure.
  3. Who Backs Up The FDIC?

    The FDIC insures depositors against loss, but what happens if it runs out of money?
  4. Analyzing A Bank's Financial Statements

    A careful review of a bank's financial statements can help you identify key factors in a potential investment.
  5. The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  6. The Future Of Sales Brokers

    The role of the sales broker, as a purely transaction-based salesperson, is changing. Find out what's next for this industry.
  7. Understanding The Consumer Financial Protection Bureau

    The new CFPB will try to make sure the financial products and services market is fair, transparent and competitive.
  8. 5 Ways Banks Will Pad Their Profits This Year

    Recent regulations have banks looking for new ways to make money. Find out how your banking will be affected in 2011.
  9. 8 Low-Cost Ways To Transfer Money

    If cost is your primary concern, there are several cheap(er) ways to move funds.
  10. How To Cut Your Banking Fees

    Smart consumers can side-step most of the new bank fees by investing some time and effort.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center