Changes in the Banking Industry
By: Kara Karle
1791 First Bank of the U.S.
1816 Second Bank of the U.S.
Printing Currency During the Civil War
1863 National Banking Act
1913 Federal Reserve Act
Banking During the Great Depression
Glass-Steagall Banking Act
Banking in the 1970's
Advocates supported extensive economic liberalization policies such as privatization, fiscal austerity, deregulation, free trade, and reductions in government spending in order to enhance the role of the private sector in the economy. The '70's showed America the end of the Vietnam War, and the troops were brought home. Unfortunately this brought on a high unemployment rate. Also, the reduction of defense spending brought on a major economic slowdown. Nixon became the first president to increase deficit spending to stabilize the economy. In addition, he instituted a 90-day wage-price control that limited increases to prices and wages to stabilize inflation. Although the control did not fix the economy overnight, it was effective at preventing worsening economic conditions in the following years.
Banking in 1982
1999 Gramm-Leach-Bliley Act
The Act repealed part of the Glass-Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass-Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998. The Gramm-Leach-Bliley Act passed in November 1999, repealing portions of the BHCA and the Glass-Steagall Act, allowing banks, brokerages, and insurance companies to merge, thus making the CitiCorp/Travelers Group merger legal. The Act further enacted three provisions that allow for bank holding companies to engage in physical commodity activities.