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First Bank of the US
The First Bank of the United States was needed because the government had a debt from the Revolutionary War, and each state had a different form of currency.The First Bank of the US received a charter in 1791 from Congress and was signed by President George Washington. This bank collected fees and made payments on behalf of the federal government. Congress voted to abandon the bank and its charter because state banks opposed it; they thought it gave to much power to the national government. -
Second Bank of the US
The main reason that the Second Bank of the United States was chartered was that in the War of 1812, the U.S. experienced severe inflation and had difficulty in financing military operations. The Charter for the bank was for 20 years and was up for renewal in 1836, but the charter never got renewed because Andrew Jackson shut it down in 1836. The main reason the bank failed is because it didn't regulate state banks or charter any other banks -
Civil War (Printing Currency)
This war was starting to get expensive so the Government had to come up with new ways to pay for this expensive war, and under the Legal Tender Act they ways were to print paper maoney know as "greenbacks" and to sell $500 million in bonds to raise money.Each state had its own greenback which made it very confusing. Issuing bills ended the long-standing policy of using only gold or silver in transactions and it allowed the government to finance the very costly Civil War. -
National Banking Act
This act allowed for the creation of a nationwide banking system that loaned money to the government to pay for the Civil war, the creation of a national system of paper money and coins, and it allowed banks to have a state or federal charter (dual banking). This act established for the 1st time, the federal dollar as the sole currency of the US. This act esentially created the US banking system. -
Federal Reserve Act
The Federal Reserve Act intended to establish a form of economic stability through the introduction of the Central Bank. The Federal Reserve Act gave the 12 Federal Reserve banks the ability to print money in order to ensure economic stability. President Woodrow Wilson was the one who signed the act into law. The original purpose of the Federal Reserve act was to stop the panics people had when their bank started to go under and they would all rush to get their money out. -
The Great Depression
The Great Depression was when everything failed. during the Great Depression was a wave of banking panics or “bank runs,” during which large numbers of anxious people withdrew their deposits in cash, forcing banks to l"iquidate loans and often leading to bank failure." in 1932 Franklin D. Roosevelt won a landslide victory in the Presidential election. Almost immediatly he issued a "Bank Holiday", which meant all banks had to be closed unitl proven financially stable -
Glass-Steagall Act
The Glass-Steagall Act was sponsored by Senator Carter Glass and Senator Henry Steagall. This act separated investment and commercial banking activities, and this act prohibited commercial banks from participating in the investment banking business. This act pronounced that commercial banks took on too much risk with depositors' money. As a result the Federal Deposit Insurance Corporation was established. The corporation ensures that if a bank goes under the depositor will still have their money -
1970s
In the 1970s Congress relaxes the restrictions on banks. "As a result, our banking system is now more competitive and more consolidated than ever". Banking deregulation of restrictions on banking lifted a set of constraints that had prevented Americans ,who trust their money with banks, to get what they deserve. -
1982
Congress allows S&L (Saving and loan) banks to make high risk loans and investments, but this was an awful idea. The investments they made were bad, on account of the bad investments banks failed the federal government had to give investors their money back, the Federal Government's debt had then reached $200 billion, then the FDIC took of the S&L.The S&L crisis was caused by deregulation which led to high interest rates that then collapse. -
Gramm-Leach-Bliley Act
This act allows banks to have more control over banking, insurance and securities. This act does have serveral cons, which include less competition, may form a universal bank, and it may lead to more sharing of information. However, The removal of the regulations that prevented the merger of financial institutions raised significant risks that these new financial institutions would have access to an incredible amount of personal information, with no restrictions upon use
