Module 13 Lesson 2 Assignment
By Sydney Westra
1791 Bank of the United States
The Bank of the United States received a charter in 1791 from Congress, which was signed by President Washington. This bank collected fees and made payments on behalf of the Federal Government. The state banks opposed the Bank of the United States, which is the reason that this bank did not succeed.
1816 Second Bank of the United States
The Second Bank of the United States received a charter in 1816. This bank was unsuccessful because it did not regulate state banks or charter any other bank. The state banks were issuing their own currency and the Federal Government did not print paper currency until the Civil War.
1861-1865 The Civil War
The Federal Government did not print paper currency until the Civil War.
1863 National Banking Act
This stated that banks could have a state or federal charter, also known as duel banking.
1913 Federal Reserve Act
This called for a system of eight to twelve regional Reserve Banks that would be owned by commerical banks and whose actions would be coordinated by a committee appointed by the President.
1930's The Great Depression
This caused banks to collapse. FDR declared a "bank holiday" where banks closed. The banks were only allowed to reopen if they proved they were financially stable.
1933 Glass-Steagall Banking Act
This established the Federal Deposit Insurance Corporation and ensured that if a bank went under, the people still had their money.
Congress relaxed the restrictions on banks. There was a lot of inflation from 1972 until about 1980.
Congress allowed S&L banks to make high risk loans and investments. These investments went bad, and banks failed. The Federal Government had to give the investors their money back. This resulted in the Federal Government becoming $200 billion in debt. The FDIC took over the S&L.
1999 Gramm-Leach-Bliley Act
This allowed banks to have more control over banking, insurance and securities. On the downside there was less competition, they may form a universal bank and this may lead to more sharing of information which means less privacy.