Reflecting the decentralized nature of our economy and the vast geographic expanse of this country, we have historically had a large number of banks, most of them very small. Initially, the chartering and supervision of banks both large and small was the purview of state governments.
Following the Civil War, national banking charters were authorized by the National Banking Act, setting in place what we now call the dual banking system. Over the ensuing decades, the regulatory structure for banks was further shaped by financial crises, including the Great Depression; the creation of a national deposit insurance system; and other forces.