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chart - In 1980s and 1990s geographical and functional...

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Geographical Regulation/Restrictions (McFadden Act, 1927) Banks prohibited from opening branches in other states and limited in opening branches within states Summary Chart of US Banking Regulation from 1920 onwards and its consequences Functional Regulation/Restrictions (Glass Steagal Act, 1933) Creation of deposit Insurance Separation banks/ corporations Banks tried to circumvent regulation by opening subsidiaries rather than branches Consequence: strong fragmentation US banking system: many small banks with local activities Consequence: US banks involved in unsophisticated actvities (no underwriting of corporate securities)
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Unformatted text preview: In 1980s and 1990s geographical and functional regulations lifted US banks expanded beyond state borders Big merger wave Number of commercial banks halved Commecial banks started to underwrite securities Summary Chart of Financial Institutions and Markets (see table in the notes for activities of institutions) Depository and non ‐ depository institutions Banks Non ‐ depository Institutions Pension Funds Insurance Companies Finance Companies (mortgage, car finance) Mutual Funds Stock Market Life Insurance Property Insurance...
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