History of the Banking Industry

By RJ Christian

1791-First Bank of America

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

1816-Second Bank of America

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

1863-National Banking Act

Banks could have a state or federal charter (duel banking)

1913 Federal Reserve Act

National bank

1930's Depression

The depression caused banks to collapse

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


Congress relaxes restrictions on banks


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

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)