-
Colonial Times
In the beginning, banks in Colonial America were highly unregulated and they were the main issuers of paper currency—not the government. This recipe for disaster was the cause of many bank failures, panics, and depressions. -
1694-Bank of England Established
The Bank of England was founded in 1694 to act as the Government's banker and debt manager. The bank is the central bank of the United Kingdom and the model on which most most modern central banks have been based off of. -
Congress Creates the First US Bank
Establishment of the Bank of the United States was part of a three-part expansion of federal fiscal and monetary power, along with a federal mint and excise taxes, championed by Alexander Hamilton, first Secretary of the Treasury. Hamilton believed a national bank was necessary to stabilize and improve the nation's credit, and to improve handling of the financial business of the United States government under the newly enacted Constitution. -
Baking beofre 1913: 1800's
The eighteenth century was the beginning of modern day banking in England. It was an exciting era in the economic realm, as it led to the emergence of modern financial institutions. International trade, as well as war with France , played a key role in the development of banks. During this time, many significant events took place, including the advent of the check and banknote, the founding of the Bank of England, and the first instances in British history of inflation and forgery. -
Second Bank of the United States
It Served as the Main Depository for Government Revenue, Making it a Highly Profitable Bank. A private corporation with public duties, the bank handled all fiscal transactions for the U.S. Government, and was accountable to Congress and the U.S. Treasury. Twenty percent of its capital was owned by the federal government, the bank's single largest stockholder -
Panic of 1837
It was a financial crisis in the United States that touched off a major recession that lasted until the mid-1840s. Profits, prices, and wages went down while unemployment went up. Pessimism abounded during the time. The panic had both domestic and foreign origins. Speculative lending practices in western states, a sharp decline in cotton prices, a collapsing land bubble, international specie flows, and restrictive lending policies in Great Britain were all to blame -
Banking Panic of 1907
The New York Stock Exchange dropped dramatically as everyone tried to get their money out of the banks at the same time across the nation. This banking panic spurred debate for banking reform. JP Morgan and others gathered to create an image of concern and stability in the face of the panic, which eventually led to the formation of the Federal Reserve. The founders of the Federal Reserve pretended like the bankers were opposed to the idea of its formation in order to mislead the public into beli -
Income tax established -16th Amendment Ratified
Taxes ensured that citizens would cover the payment of debt due to the Central Bank, the Federal Reserve, which was also created in 1913.The 16th Amendment stated: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration." -
Federal Reserve Act Passed
Two days before Christmas, while many members of Congress were away on vacation, the Federal Reserve Act was passed, creating the Central banking system we have today. It was based on the Aldrich plan drafted on Jekyll Island and gave private bankers supreme authority over the economy. They are now able to create money out of nothing (and loan it out at interest), make decisions without government approval, and control the amount of money in circulation. -
"Black Thursday" Stock Market Crash
The most devastating stock market crash in history. Billions of dollars in value were consolidated into the private banker’s hands at the expense of everyone else. -
The Financial Services Modernization Act Allows Banks to Grow Even Larger
Many economists and politicians have recognized that this legislation played a key part in the subprime mortgage crisis of 2007. It repealed part of the Glass-Steagall Act of 1933 and allowed investment banks, commercial banks, securities firms, and insurance companies to merge. Citigroup was a major proponent of this particular bill (it had already merged with Travelers Insurance and needed to find a way to legally keep the corporation together). The government gave Citi officials the opportun -
Banking in the 20th century
The early 2000s were marked by consolidation of existing banks and entrance into the market of other financial intermediaries: non-bank financial institution. Large corporate players were beginning to find their way into the financial service community, offering competition to established banks. The main services offered included insurance, pension, mutual, money market and hedge funds, loans and credits and securities. -
Period: to
Worst Financial Crisis Since the Great Depression
The financial crisis impacted people around the world – millions lost their homes, jobs, and retirement funds. Many of the smaller banks were absorbed by others, which allowed the biggest banks to further consolidate wealth and eliminate competition. In 2008, J.P. Morgan Chase & Co. bought up both Washington Mutual (the biggest bank to “fail” in the history of the United States) and Bear Stearns (the fifth largest investment bank).
