The Banking Industry

1791 Bank of the US

the bank collected fees and made payments for the federal government.state banks oppsed it because they thought it gave to much power to national governments.
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1816 Second Bank of the US

Failed because it didn’t regulate state banks or charter any other bank the State banks were also issuing their own currency

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Civil War

Federal government didn’t print paper currency until the Civil War.
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1863 National Banking Act

Banks could have a state or federal charter
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1913 Federal Reserve Act

national bank
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1930’s Great Depression (regarding banking)

FDR declared a “bank holiday” where banks closed. Only allowed to reopen if they proved they were financially stable

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Steagall Banking Act

Established the Federal Deposit Insurance Corporation. Ensures that if a bank goes under, you still have your money

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1970’s (regarding banking)

Congress relaxes restrictions on banks
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1982 (regarding banking)

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 and The FDIC took over the S&L

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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)

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