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Period: to
Events Leading to the Establishment of the FDIC
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The Great Depression Hits the U.S.
Stock market has just took a huge crash, bieng one of the biggest contributors of the Great dpression, many banks fail because loans to stock speculators are never paid back. The U.S. expirence the longest mose severe recession in history. -
Hawley-Smoot Tariff Act of 1930
Tarrifs on imports increase, preventing free trade, and depression lengthens. -
Period: to
Height of the Great Depression
Unemployment is 25 percent.
National income is 50 percent below that of 1929,
Stock market is 75 percent below its 1929 high,
Mnay Banks and Unions are shutting down. -
Reconstruction Finance Corporation (RFC) Act of 1932
Federal Governmnet, provides loans to coutnless financing agencies, many of which loose the the money to unqualified borrowers, creating a snowball effect in the banking collapse. -
Federal Home Loan Bank Act of 1932
Establishes the Federal Home Loan Banks (FHLBs),
Gives the FHLBB authority to regulate and supervise S&Ls.
Gives FHLBs the authority to lend to S&Ls to finance home mortgages, puts many americans in single family homes. -
FDR is elected President.
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FDR Declares Banking Holiday
temporarily closes all U.S. banks.
Approximately 4,000 commercial banks fail.
1,700 S&Ls fail.
Foreclosures clog banks and S&Ls with unsaleable assets. -
The Securities Act of 1933
This act requires strong disclosure statements of publicly held corporations, which deprives bankers of their monopoly on information. -
The Banking Act of 1933
"Establishes the FDIC as a temporary government corporation
Gives the FDIC authority to provide deposit insurance to banks" -
FDIC deposit insurance goes into temporary effect.
The FDIC deposit insurance goes into temporary effect on January 1, 1934. The deposit insurance level is $2,500. -
The Banking Act of 1935
Establishes the FDIC as a permanent agency of the government Provides for permanent deposit insurance and maintains it at the $5,000 level.
