A Brief History of the Banking System
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A Brief History of the Banking System
1863
Crisis: Congress needed to finance its Civil War debt.
Response: It passed the National Bank Acts, creating a uniform national currency and national banking system.
1913
Crisis: The banking system suffered from periods of severe illiquidity, runs on deposits and panics.
Response: Congress created the Federal Reserve System -- a decentralized central bank designed to prevent bank runs and panics by providing emergency backing to commercial banks.
1933
Crisis: Thousands of banks failed in the 1920s and early 1930s.
Response: The Federal Deposit Insurance Corporation was established to guarantee deposits held by commercial banks.
2008
Crisis: A fragmented regulatory structure may have made it harder for the government to monitor and correct problems that led to the current financial crisis.
