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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. -
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
Federal government didn’t print paper currency until the Civil War. -
The first paper currency is printed during the civil war.
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1863: National Banking Act. Banks could have a state or federal charter (duel banking)
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1913: Federal Reserve Act. America's National bank.
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1930s: Great Depression caused banks to collapse.
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FDR declared a “bank holiday” where banks closed
Only allowed to reopen if they proved they were financially stable. Glass-Steagall Banking Act - Established the Federal Deposit Insurance Corporation. Ensures that if a bank goes under, you still have your money. -
End of the Great Depression
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1970s: Congress relaxes restrictions on banks
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1982: 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.
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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).
