The Banking Industry

1791 Bank of the United States

The 1791 bank of the United States was the first bank that the United States had. This bank is located in Philadelphia, Pennsylvania.

1816 Secind Bank of the United States

This second bank, created in 1816, was given the same responsibilities as the first bank. However, unlike the first bank, it failed to regulate and charter state banks. This meant that state banks were issuing their own currency

Printing Currency in the Civil War

Before the civil war, state banks were issuing their own currency, which was an issue. This problem wasn't fixed until the federal government started printing paper currency

1863 National Banking Act

Through this banking act, banks were allowed to have a state or federal charter.

  • State Charter- a document issued by the state outlining the conditions under which a corporate body is organized
  • Federal Charter-explains an agreement that establishes a corporation

1913 Federal Reserve Act

The 1913 federal reserve act was intended to set up economic stability through a central bank.

1930's Great Depression (banking)

The Great Depression of the 1930's caused banks everywhere to collapse. A bank holiday was declared where all banks were closed. The banks were to stay closed unless they could prove that they were financially stable.

Glass-Steagall Banking Act

The Federal Deposit Insurance Corporation (FDIC) was established through the Glass-Steagall Banking Act.

  • FDIC- preserves and promotes public confidence in the US financial system

The act ensures that you will still have money if the bank goes under

Banking in the 1970's

During the 1970's, congress relaxed restrictions on banking

Banking in 1982

S&L (savings and loan banks) were allowed to make high risk investments and loans. After these investments were made, they failed, which caused the banks to fail.

Gramm-Leach-Bliley Act

This act, established in 1999, allowed banks to have more control over their banking, insurance, and securities. The bad part about this is that there is less competition, more information amy be shared, and it may lead to a universal bank.