History of the Banking Industry
By RJ Christian
1791-First Bank of America
The Bank of the US received a charter in 1791 from Congress; signed by President Washington
1816-Second Bank of America
Failed because it didn’t regulate state banks or charter any other bank
1863-National Banking Act
Banks could have a state or federal charter (duel banking)
1913 Federal Reserve Act
National bank
1930's Depression
The depression caused banks to collapse
FDR declared a “bank holiday” where banks closed
Only allowed to reopen if they proved they were financially stable
Glass-Steagall Banking Act
Established the Federal Deposit Insurance Corporation
Ensures that if a bank goes under, you still have your money
1970s
Congress relaxes restrictions on banks
1982
Congress allows S&L banks to make high risk loans and investments
Investments went bad
Banks failed
Federal government had to give investors their money back
Federal government debt: $200 billion
The FDIC took over the S&L
1999-Gramm-Leach-Bliley Act
Allows banks to have more control over banking, insurance and securities
Cons: less competition, may form a universal bank; may lead to more sharing of information (reduction of privacy)