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.
Glass Steagal Banking Act
Established the Federal Deposit Insurance CorporationEnsures that if a bank goes under, you still have your money
Congress allows S&L banks to make high-risk loans and investments
Investments went bad
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)