The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to guarantee the safety of deposits in member banks. The FDIC requires these banks to have sufficient capital reserves to prevent default.
 
The FDIC nickname “Forever Demanding Increased Capital” has been cited in print since at least 1977.
 
 
Wikipedia: Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. As of November 18, 2010 (2010 -11-18), the FDIC insures deposits at 7,723 institutions. The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages banks in receiverships (failed banks).
 
Insured institutions are required to place signs at their place of business stating that “deposits are backed by the full faith and credit of the United States Government.” Since the start of FDIC insurance on January 1, 1934, no depositor has lost any insured funds as a result of a failure.
 
At Q4 2010 there were 884 banks having very low capital cushions against risk. It was nearly 12 percent of all federally insured banks, the highest level in 18 years.
       
Google Books
Change in the Savings and Loan Industry:
Proceedings of the second annual conference, December 9-10, 1976, San Francisco, California
By Federal Home Loan Bank of San Francisco
San Francisco, CA: Federal Home Loan Bank of San Francisco
1977
Pg. 112:
For this reason, the FDIC has been described by a former Chairman as an agency whose initials stand in reality for “Forever Demanding Increased Capital.”
     
Google Books
Problem and Failed Institutions in the Commercial Banking Industry
Volume 4
By Joseph F. Sinkey
Greenwich, CT: Jai Press
1979
Pg. 44:
...have the direct authority to prevent banks from reducing their equity capital; they must be content to jawbone, ie, Forever Demanding Increasing Capital (FDIC).
 
20 November 1983, Los Angeles (CA) Times, “Southland Business,” pt. VI, pg. F4:
The acronym “FDIC,” he suggests, really stands for “Forever Demanding Increased Capital.”
 
Google Books
Commercial Bank Management
By Frank P. Johnson and Richard D. Johnson
Chicago, IL: Dryden Press
1985
Pg 330:
In a recent address William Isaac notes that many bankers really believe that FDIC stands for “Forever Demanding Increased Capital.”
 
New York (NY) Times
Bad loans leave small U.S. banks short of capital
By Paritosh Bansal and Dan Wilchins
Published: Thursday, April 3, 2008
(...)
The Federal Deposit Insurance Corp., a regulator that also insures many bank deposits, in mid-March alerted banks to the importance of managing commercial real estate exposure. Banks with high exposure to construction loans and commercial mortgages need strong capital and loan loss reserves, it said.
 
“Regulators, every time you hear them say something, they say, ‘more capital,’” said Chip MacDonald, a partner at the law firm Jones Day. “You know the old adage, that FDIC stands for ‘forever demanding increased capital.’ “
 
Forbes.com
How To Hold Bank Regulators Accountable
Daniel Hemel, 12.18.08, 05:24 PM EST
(...)
But FDIC Chairman Sheila Bair, a registered Republican, has become the darling of Democrats on Capitol Hill not the least because her agency has garnered a reputation for being the toughest of the regulators. (Longtime Washington wags quip that FDIC stands for “Forever Demanding Increased Capital.”)
 
NPR
FDIC Chief Earned Rep As A Consumer Advocate
by Yuki Noguchi
June 27, 2011 Sheila Bair is stepping down as one of the most high-profile chairmen of the FDIC. Bair, a Republican, transformed herself as a populist that fought both Republican and Democratic administrations to try to push her policies through.
(...)
Mr. ELY: Under Sheila, the FDIC has lived up to its nickname of Forever Demanding Increased Capital. And I don’t have any problem with independence, as long as it’s based on sound judgment. I feel that in many cases that’s not true, as far as Sheila’s concern.