Module 13 Lesson 2
Banking Industry in the U.S.
1791 Bank of the US
- Started when Washington was President
- Collected fees and made payments for the federal government
- State banks opposed its power
1816 Second Bank of the US
Civil War (printing currency)
States began issuing their own currency. The federal government stopped this by printing a national currency.
1863 National Banking Act
Banks could dual bank by having a state or federal charter
1913 Federal Reserve Act
1930s Great Depression
FDR established the “bank holiday” where all banks closed. Only the stable banks could reopen.
Glass-Steagall Banking Act
Established the Federal Deposit Insurance Corporation that will secure a person’s money if the bank was to fail. made deposits riskier rather than safer, so it had an opposite effect.
1970’s
Congress loosens their tight restrictions on the banks
1982
Banks failed because Congress allowed banks to make high risk loans as well as investments. Federal government went into $200 billion debt.
1999 Gramm-Leach-Bliley Act
Allowed banks to have more control over insurance, security, and banking. Also allowed commercial banks to act as investment banks. Banking institutions could provide a broader range of services.