Banking Timeline

A Timeline of Banking

The 1791 Bank of the U.S.

The Bank of the US received a charter in 1791 from Congress; signed by President Washington. the bank was shut down because state banks thought it gave too much power to the national government.

1816 Second Bank of the U.S.

Second Bank of the US was chartered in 1816. it failed because it didn’t regulate state banks or charter any other bank and state banks were issuing their own currency. The Federal government didn’t print paper currency until the Civil War.

Timeline Continued

Glass Steagal 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-Bliley 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)