Module 13 Lesson 2 Assignment
By Bridget Garner
1791 Bank of the US
The Bank of the US received a charter in 1791 from congress; signed by President Washington and promoted by the secretary of the Treasury Alexander Hammonton. This bank collected fees and made payments on behalf of the federal government. Bank went away because state banks opposed it; thought it gave too much power to national government.
1816 Second Bank of the US
The Second Bank of the US had the same responsibilities and power as the first bank but would not even enjoy the limited success of the First Bank. failed because it didn't regulate state banks or charter any other bank.
Civil War (printing currency)
State banks were issuing their own currency. Federal government didn't print paper currency until the civil war. To pay for the war the Confederate government issued a vast array of paper currencies. At least seventy different types of currency, totaling more than 1.5 billion dollars, and incredible sum at that time.
1863 National Banking Act
Banks could have a state or federal charter (dual banking)
1913 Federal Reserve Act
The Federal Reserve Act passed during president Wilson's term. This created our National Bank.
Great 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
The Glass-Steagall Banking Act established the federal deposit insurance corporation. Ensures that if a bank goes under, you still have your money.
Congress relaxes restrictions on banks.
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- Bailey Act
The 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)