Module 13 Lesson 2

Mastery Assignment

1791 Bank of the US

The Bank of the US received a charter in 1791 from Congress; signed by President Washington

This bank collected fees and made payments on behalf of the federal government.

Bank went away because state banks opposed it; thought it gave too much power to national government

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1816 Second Bank of the US

Second Bank of the US was chartered in 1816.

Failed because it didn’t regulate state banks or charter any other bank

State banks were issuing their own currency

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1861 Civil War (printing currency)

Federal government didn’t print paper currency until the Civil War; print paper money known as greenbacks; sell $500 million in bonds to raise money; nationwide banking system that loaned money to the Government to pay for the war; and a national system of paper money and coins.
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1863 National Banking Act

Banks could have a state or federal charter (duel banking); encouraged development of a national currency backed by bank holdings of U.S. Treasury securities; The Act shaped today's national banking system and its support of a uniform U.S. banking policy.

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1913 Federal Reserve Act

the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes (now commonly known as the U.S. Dollar)

National bank; The Act was signed into law by President Woodrow Wilson.

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1930’s Great Depression (regarding banking)

Great Depression caused banks to collapse

FDR declared a “bank holiday” where banks closed

Only allowed to reopen if they proved they were financially stable

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1933 Glass-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; The Bank Secrecy Act of 1970; the act requires financial institutions to keep records of cash purchases of negotiable instruments, and file reports of cash purchases of these negotiable instruments of more than $10,000, and to report suspicious activity that might signify criminal activities.
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1982 (regarding banking)

Congress allows S&L banks to make high risk loans and investments.

Investments went bad; The United States and Japan exited the recession relatively early, but high unemployment would continue to affect other OECD nations through to at least 1985.
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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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