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1913 – The Federal Reserve Act created the Federal Reserve System, the central banking system of the United States, and granted it the legal authority to issue legal tender. 1930–33 – In the wake of the Wall Street crash of 1929, 9,000 banks close, wiping out one third of the money supply in the United States. [217]
The committee issued a scathing report on the banking trade, and found that the officers of J.P. Morgan & Co. also sat on the boards of directors of 112 corporations with a market capitalization of $22.5 billion (the total capitalization of the New York Stock Exchange was then estimated at $26.5 billion). [16]
The second problem was that the system created seasonal liquidity spikes. A rural bank had deposit accounts at a larger bank, that it withdrew from when the need for funds was highest, e.g., in the planting season. [11] These liquidity crises led to bank runs, causing severe disruptions and depressions.
This tax also gave rise to another response by state banks—the widespread adoption of the demand deposit account, also known as a checking account. By the 1880s, deposit accounts had changed the primary source of revenue for many banks. The result of these events is what is known as the "dual banking system".
A Monetary History of the United States, 1867–1960 is a book written in 1963 by future Nobel Prize-winning economist Milton Friedman and Anna Schwartz.It uses historical time series and economic analysis to argue the then-novel proposition that changes in the money supply profoundly influenced the United States economy, especially the behavior of economic fluctuations.
The swinging 1960s could help to unpack a key puzzle of our current era: America's funky economic mood. ... While many cheered on the social changes happening in both eras, it also led to fretful ...
While most countries have only one bank regulator, in the U.S., banking is regulated at both the federal and state levels [5] in an arrangement known as a dual banking system. [6] Depending on its type of charter and organizational structure, a banking organization may be subject to numerous federal and state banking regulations.
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