The History of Banking
The important things covered are; 1791 Bank of the US, 1816 Second Bank of the US, Civil War Printing Currency, 1863 National Banking Act, 1913 Federal Reserve Act, 1930's Great Depression, Glass-Steagall Banking Act, 1970's Banking, 1982 Banking, and the 1999 Gramm-Leach-Bliley Act.
1791 Bank of the US
The First Bank of the US was created in 1791 to recover from the debt received from the Revolutionary War. The Bank got a charter from Congress. The bank collected fee's and made payments on behalf of the Federal Government. However, this bank was opposed by the states because they felt it gave the National Government to much power.
1816 Second Bank of the US
In 1816 the Second Bank of the US was chartered. It was created because the war of 1812 put the US in debt again. This bank was much larger and more powerful. However, this bank also failed because it did not regulate state banks or charter any other bank.
1861 Civil War
In the Second Bank of the US states were issuing there own currency but the Federal Government didn't start printing paper currency until the civil war.
1863 National Banking Act
The First and Second Banks of the US were different from each other, so therefore they found a way to put them together "duel banking". Banks now could have either a State or Federal Charter.
1913 Federal Reserve Act
The 1913 Federal Reserve Act is the act when congress established the Federal Reserve System or the "Fed". This is the Central Banking System of the United States!
1930's Great Depression
The Great Depression had a major impact on Banks. Many banks collapsed . On one day, all the banks closed and were only able to reopen if they were financially stable enough.
1933 Glass-Steagall Banking Act
Since the Great Depression, many people were concerned if their money would be there if the bank collapsed. This Act ensures people that if your bank collapses, you still have your money!
There used to be many restrictions on banking, in the 1970's congress reduced restrictions on banks.
In 1982 banking went downhill. Congress aloud savings and loan banks to make high risk loans and investments. The result was banks failed due to the investments going bad. This put the Federal Government in deep debt because they had to pay all the investors their money back. The FDIC (Federal Deposit Insurance Corporation) had to take charge.
1999 Gramm-Leach-Bliley Act
This act occurred in 1999 and it allowed banks to have more control. They got more control over things such as banking, insurance, and securities. There was some downsides though; it lead to less competition creating a chance for a universal bank. A universal bank would cause more sharing which links to less privacy.