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The Bank of the US received a charter in 1791 from Congress; signed by President Washington
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Second Bank of the US was chartered in 1816.Failed because it didn’t regulate state banks or charter any other bankState banks were issuing their own currencyFederal government didn’t print paper currency until the Civil War
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Banks could have a state or federal charter (duel banking)
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Created a National bank
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Great Depression caused banks to collapse. FDR was president and declared a “bank holiday” where banks closed. Only allowed to reopen if they proved they were financially stable.
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Established the Federal Deposit Insurance Corporation.Ensures that if a bank goes under, you still have your money
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Congress relaxes restrictions on banks
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Congress allows S&L banks to make high risk loans and investments. This lead to Investments going bad and banks failed. The Federal government had to give investors their money back. This in turn, left the Federal government at a debt of $200 billionThe FDIC took over the S&L
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Allows banks to have more control over banking, insurance and securitiesCons: less competition, may form a universal bank; may lead to more sharing of information (reduction of privacy)