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So I was watching an episode of the 60s Batman TV show this morning, and Zelda robbed a bank. This got me thinking.

When a bank is robbed, their insurance/FDIC will replace the cash that was stolen. However, that cash the robbers now possess is still within circulation. So does the Federal Reserve not print more to replace it so as to not devalue the dollar? Do they have a number "built in" to their printing guidelines per year?

In the show it was $100,000, though it was 1966. Hypothetically, what would happen if hundreds of millions or a few billions of dollars were stolen?

  • Sorry if this is the wrong site for this. If it is, let me know where else I should ask this. – krillgar Apr 2 '16 at 23:09
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    I'm relatively new to this site, but it is more geared toward personal finance. Your question might be better suited for Economics.SE, but I admit I don't know the scope of the questions fielded there. – Wesley Marshall Apr 2 '16 at 23:50
  • Questions about the amount of money in circulation really aren't on topic here; that's an economics question, not a Personal Finance question. – keshlam Apr 3 '16 at 1:22
  • It seemed unlikely that any bank robbery would net more than $100M so I had to look it up. The biggest bank heist in US history was $19M in 1997. Worldwide it was $282M from a Baghdad bank. – JohnFx Apr 3 '16 at 16:32
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FDIC does not insure against robbery. From the FDIC website under the heading "What's not insured?":

Robberies and Other Thefts

Stolen funds may be covered by what's called a banker's blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank's customers.

If a third party somehow gains access to your account and transacts business that you would not approve of, you must contact the bank and your local law enforcement authorities, who have jurisdiction over this type of wrongdoing.

So either the bank is out the funds and takes the loss, in which case no new money enters circulation, or the bank has insurance that repays the bank, in which case the insurance company incurs a cost and no new money enters circulation. Either way, no new money enters circulation.

  • In cases where the FDIC does pay: FDIC stands for "Federal Deposit INSURANCE Corporation" and in principle it works like any insurance company: it collects premiums (called "assessments") from its members, and uses the money from these premiums to pay losses. So in general, an FDIC payout does not add any money to the economy. However, the FDIC is also authorized to borrow from the US Treasury. Assuming that the government doesn't cut spending in other areas -- which it pretty much never does -- this would add funny money to the economy. – Jay Apr 3 '16 at 6:45

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