Bank
of North America had the distinction of being the first
commercial bank in the United States. It was established
in the year 1781 through an act of United States Congress.
It was empowered to print currency notes as well. It
had even acted as the fiscal agent for the government.
Later, two more banks were chartered in the year 1784.
They were Bank of New York and Bank of Massachusetts. In
the year 1838, the era of free banking has been ushered
in through an act called the Free Banking Act. Under
this act, a State Bank may be chartered subject to compliance
with certain charter conditions. Later, in the year
1863, the Congress passed the National Bank Act. Under
this act, many banks have been established throughout
the United States that were chartered by the federal
government. These were essentially state chartered banks.
It
was in the year 1913 that the Federal Reserve Act was
enacted. This act is the basis for the present day Federal
Reserve System. Under this system, apart from the Washington-based
Federal Reserve Bank, which is the headquarter, 12 more
regional Federal Reserve Banks have been established.
The Banking Act of 1933 (which was amended in the year
1935) has strengthened the supervisory powers of the
Federal Reserve Board and regional authorities. The
Federal Deposit Insurance Corporation has also come
into being as an offshoot of the Banking Act. Two more
acts need a mention here, one is the Glass-Steagall
Act of 1932, which prohibited banks from expanding geographically,
moving into insurance business and large areas of securities
business. The other one is the Gramm-Leach- Bliley Act
1999, which replaced the earlier Glass-Steagall Act.
This act has removed the lines of business barriers
and allowed banks to acquire securities firms as well
as insurance firms and vice versa. GLB Act, a land mark
act, has been termed as the one that brought into being
the universal banks. However, this act has erected new
barriers to alliance acquisitions. |
