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First Bank of the United States
Congress set up the Bank of the United States with a 20 year charter to operate. -
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Chaos in American Banking
After the charter for the First Bank of the United States expired, state banks were chartered without considering their stability and creditworthiness. -
Second Bank of the United States
Congress chartered the Second Bank of the United States to help stabilize the finance market. -
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Free Banking Era
After the Second Bank charter ended, states chartered hundreds of banks. Naturally this gave rise to many problems from bank runs to fraud. -
North and South Consolidate Currencies
The Union made demand notes called greenbacks. The south made currency backed up cotton but their value got weakened and eventually became worthless. -
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National Banking Acts
The National Banking Acts of 1863 and 1864 gave the federal government power to charter and regulate banks, and issue paper money. -
Gold Standard
Paper money has its value set in Gold. Gold became the standard with the exchange rate $20 for an ounce of gold. People became more confident in the banking system. -
Federal Reserve System
The Federal Reserve Act was signed establishing the Federal Reserve System. Their job as the nation's first central bank is to lend to banks in need. -
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Great Depression
Banks faced a tough time during the Great Depression. -
Federal Deposit Insurance Corporation
FDIC was established to encourage people to use the banking system again. They insured people's deposits by up to $250,000 -
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Savings and Loans Crisis
Deregulation of the banking system caused savings and loans crisis because they were unprepared for the intense competition in the market. -
Financial "Meltdown"
Banks made housing loans to people who weren't qualified to pay them in exchange for higher interest rates. When people started defaulting on these loans, lenders were hurt and some even declared bankruptcy. -
Financial Bailout
As a response to the meltdown, the US government came up with a bailout package worth $700 billion.
