Module 13 Lesson 2 Assignment
By: Derrick Carter
Bank of the U.S. ; 1791
The Bank of the U.S. was given a charter by congress in 1791 from Congress. George Washington (who was the president) signed it. The bank collected fees and made payments for the federal government or on their behalf. This bank eventually went away because state banks said it gave the national government to much power and opposed it.
The Second Bank of the U.S. ; 1816
The second bank of the U.S. was chartered in 1816. This bank also failed because it didn't charter any other bank and did not regulate state banks. State banks were issuing their own currency. The Federal government didn't print paper currency until the Civil War.
National Banking Act ; 1863
The national banking act of 1863 created "duel banking". This was where banks could have a state or federal charter.
Federal Reserve Act ; 1913
This created a national bank for America. When banks needed to borrow money, they could get it from the National Bank (FED).
Great Depression ; 1930's
The great depression of the 1930's cause banks everywhere to collapse. Franklin D. Roosevelt declared a "bank holiday" where all banks closed. Only allowed the banks that could prove they were financially stable to reopen.
Glass-Steagall Banking Act
This act established the Federal Deposit Insurance Corporation. This act made it so if a bank goes under or bankrupt you will still have your money. In the 1970's, congress backs off some on the restrictions on banks. In 1982, Congress allows S&L banks to make high risk loans and investments. These investments went bad and banks failed and all investors got there money back from the federal government. The government was in $200 billion dollars of debt.
Gramm-Leach-Bliley Act ; 1999
This act allowed banks to have more control over banking, insurance, and securities. There were cons that went along with this though. There was less competition, may lead to more sharing of information, or may lead to form a universal bank.