Banking Industry

United States

1791 Banking In the US

  • The Bank US received a charter in 1791 from Congress
  • this bank collected fees and made payments on behalf of the federal government
  • the first bank went away because state banks opposed it; thought it gave to much power to the national government

1816 Second Bank of the US

  • The second bank failed because it didn't regulate state banks
  • didn't charter any other banks

Civil War

  • federal government started printing paper currency
  • there was at least 70 different currencies

1863 National Banking Act

  • banks could have a state or federal charter which is known as dual banking

1913 Federal Reserve Act

  • national banks

1930's Great Depression

  • Franklin D. Roosevelt declared a "bank holiday" where banks are closed
  • banks were only allowed to reopen if they proved they were financially stable

Glass-Steagall Banking Act

  • Installed the Federal Deposit Insurance Corporation
  • FDIC- ensures that if a bank goes under, you still have your money

1970's

  • congress relaxes restrictions on the banks

1982

  • congress allows S&L banks to make high risk loans and investments
  • the investments went bad causing banks to fail
  • The Federal government had to give investors their money back
  • debt was $200 billion
  • FDIC took over the S&L

1999 Gramm-Leach-Bliley

  • allows banks to have more control over banking, insurance, and securities
  • the cons of that were that there was less competition and reduction of privacy