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First Bank of the United States
First National Bank of the US was established to bring stability to American banking. -
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Period of Instability
After the charter of the First Bank of the United States fell the system went into chaos because state banks weren't regulated and did what they wanted -
Second Bank of the United States
Second Bank of the United States was established to rebuild public confidence in the national banking system. -
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Free Banking Era
After the end of the charter of the second bank of the United States, smaller banks started popping up and with it came instability, just like the period before. -
Demand Notes were Created
Demand notes called greenbacks were created to used as the official currency of the Union. -
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National Banking Acts
The National Banking Acts of 1863 and 1864 gave the federal government the power to charter banks, require reserves of gold and silver, and to issue a national currency. -
Money Set in Gold
The value of paper notes were set in gold. An ounce of gold is equal to $20 -
Creation of the Federal Reserve
The Federal Reserve was established to be the nations central bank. The Feds can lend money to other banks, print money, give short term loans, and divided the country into 12 districts. -
Banking Reforms
After the Great Depression, President Roosevelt instituted the Federal Deposit Insurance Corporation to insure deposits should banks fail like they did during the Great Depression. -
Financial Meltdown
The rise of foreclosures due to subprime mortgages (loans made to high risk people for a higher interest rate) burst the housing bubble and sent the economy straight into a recession. Investors lost confidence and people lost their houses. -
Financial Bailout
As a response to the meltdown, the government came up with a package worth $700 Billion to help banks, auto, and other industries.
