The Changes to the Banking Industry

by Chris Breuer

1791 Bank of the US

  • The bank collected fees and made payments on behalf of the federal government
  • States apposed this bank because it gave the national government too much power and it went away

1816 Second Bank of the US

  • It did not regulate state banks so states were issuing their own state currency and it failed

Civil War

  • Paper currency was beginning to be printed out and distributed through the nation

1863 National Banking Act

  • This said that banks could have a state or federal charter; dual banking

1913 Federal Reserve Act

  • This Act established a National bank

1930’s Great Depression

  • The Great depression caused banks to collapse
  • They were only allowed to reopen if they were financially stable
  • FDR declares "bank holiday" where all banks were closed

Glass-Steagall Banking Act

  • This act established the Federal Deposit Insurance Corporation (FDIC)

  • It ensures that if a bank goes under, you still have your money


  • Congress relaxes many restrictions on banks


  • Congress allows S&L banks to make high risk loans and investments

  • Investments went bad

  • The FDIC took over the S&L

  • Federal government had to give investors their money back

  • Federal government debt: $200 billion

  • Many banks failed

1999 Gramm-Leach-Bliley Act.

  • Allows banks to have more control over banking, insurance and securities

  • It also brings cons such as, less competition, they may form a universal bank; may lead to more sharing of information (reduction of privacy)