BANKS - BANKS What is a bank Holds money Lends money Where...

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BANKS What is a bank? Holds money. Lends money. Where do banks fit in the economy? Financial intermediary. Helps equate savings and investment. Why did banks develop? Security. Convenience. History of banks in the US. “Modern Banking” began in late 18 th century – banks as providers on multiple services. There was no central bank in the United States (in the sense of being operated by the government) until 1913. 1 st Major bank was Bank of NA, 1782 1 st quasi central bank was Bank of US in 1791 Early debate was over federal or state control of banks – local interests (farmers) won out and got rid of Bank of US War of 1812 led to 2 nd Bank of US in 1816. Andrew Jackson pushed for elimination of this bank. Almost all banks in 19 th century were local state chartered banks. No national currency. Period of frequent bank failures, panics (1819,1837,1857,1873,1884,1893,1907,1930), “wildcat” banks. National Bank Act of 1863 – continuation of the State/National debate (notice the date).
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BANKS - BANKS What is a bank Holds money Lends money Where...

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