...The US Banking System: Origin, Development, and Regulation by Richard Sylla Currency note of one shilling, six pence, printed in the colony of New Jersey in 1776. (Gilder Lehrman Collection) Banks are among the oldest businesses in American history—the Bank of New York, for example, was founded in 1784, and as the recently renamed Bank of New York Mellon it had its 225th anniversary in 2009. The banking system is one of the oldest, largest, and most important of our industries. Most adult Americans deal with banks, often on a fairly regular basis. Nonetheless, banks and banking seem rather mysterious. What do banks do? Why have they for so long been an integral part of our economy? Why, as in the financial crisis that commenced in 2007, do banks every so often get into trouble and create serious problems for the country? Banks have two important economic functions. First, they operate a payments system, and a modern economy cannot function well without an efficient payments system. We make most of our payments by writing checks, swiping credit cards issued by banks or tied to them, and by paying bills via online banking. Most of the money stock of the country is in fact bank money; the rest of the currency is “legal tender” issued by the government, namely Federal Reserve Notes and coins. We have confidence in bank money because we can exchange it at the bank or an ATM for legal tender. Banks are obligated to hold reserves of legal tender to make these exchanges when we...
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...“human touch” in its simplest form - quality customer service. Operating in eight states, Washington Federal maintains a relatively small staff of 885 employees. As a financial institution, Washington Federal is highly regulated by certain federal agency regulations. This paper will explore the regulations currently in effect for financial institutions, as well as the origin, evolution, and efficacy of these regulations within Washington Federal Savings. Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation [FDIC] is an independent agency of the United States government. The FDIC protects depositors against the loss of deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the credit of the United States government. An insured bank is any bank or savings association with FDIC insurance (Federal Deposit Insurance Corporation [FDIC], 2007). The FDIC was created in 1933 by the Glass-Steagall Act. This was a merging of two separate acts which were created by the U.S. government in reaction to the stock market crash of 1929 following which 4004 banks, with an average of $900,000 in deposits, closed. The banks eventually merged into stronger institutions and depositors ultimately recovered about 85% of their original deposit value, but the damage to faith in the banking industry had already been done. In May of 1933, The U.S House, Banking and Currency Committee...
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...The banking industry was first established in 1781 with the Bank of North America in Philadelphia. Robert Morris was the first Superintendent of Finance and proposed that the Bank of North America would act as the sole fiscal and monetary agent for the government. Congress in 1791, chartered the First Bank of the United States to succeed the Bank of North America but failed to renew the charter for the Bank of the United States in 1811 when it expired. The Second Bank of the United States was opened in 1817 mainly due to inflation after the War of 1812 and had a term of 20 years, however, some political figures did not want to extend the charter due to the belief that gold was the only true form of money. In September 1933, President Andrew Jackson ended the charter for the Second Bank of the United States....
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...RESERVE BANK OF INDIA (RBI) INTRODUCTION: The Reserve Bank of India (RBI) is the Central Bank of the country. It was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The Reserve Bank was started as share-holders bank with a paid-up capital of Rs.5 crores. On establishment it took over the function of management of currency from the Government of India and power of credit control from the Imperial Bank of India. The Central Office of the Reserve Bank was initially established in Calcutta but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. PREAMBLE: The Preamble of the Reserve Bank of India describes the basic functions of the Reserve Bank as: "...to regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage." ORGANIZATION OF THE RESERVE BANK: 1. Central Board 2. Local Board 3. Board for Financial Supervision 4. Board for Payment and Settlement Systems 1. CENTRAL BOARD: The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. • Appointed/nominated for...
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...1935 Governor Duvvuri Subbarao Central bank of India Currency Indian Rupee ISO 4217 Code INR Reserves US$300.21 billion (2010) Base borrowing rate 7.25% Base deposit rate 6.25% Website rbi.org.in Central Board The Reserve Bank's affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act. * Appointed/nominated for a period of four years * Constitution: * Official Directors * Full-time : Governor and not more than four Deputy Governors * Non-Official Directors * Nominated by Government: ten Directors from various fields and one government Official * Others: four Directors - one each from four local boards Functions : General superintendence and direction of the Bank's affairs Reserve Bank of India regional office, Delhi entrance with the Yakshini sculpture depicting "Prosperity through agriculture".[25] The central bank till now was governed by 21 governors . The 22nd, Current Governor of Reserve Bank of India is D. Subbarao The regional offices of GPO (in white) and RBI (in sandstone) at Dalhousie Square, Kolkata. delhi bangalore Functions [edit] Monetary authority The Reserve Bank of India is the main monetary authority of the country and beside that the central bank acts as the bank of the national and state governments. It formulates, implements...
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...for granted, it was not always a part of banking.” (Woodards) Just as Chris Woodards stated, I was one of those individuals that were taking the checking system for granted, that was until I started to do this research. As I was reading information about the history of the banking system and the checking accounts and check, I really did not know that there was so much information to the history of checking. I just thought that it was something that everyone did or has done forever, not ever paying attention to it. I knew of it just being a part of everyday life, especially as I was growing up. For buyers, checks are a more convenient, secure, and verifiable payments instrument as long as they have the funds in their account to cover the check so it does not get a stamp of “Non-Sufficient Funds.” Before the break out of the Civil War, banknotes and bills of exchange were used extensively; they remained competitive with the deposit accounts. Once the war broke out, congress passed legislation that was known as the National Banking Act. These were the two acts that established the banking system in the United States as we know, and they were the National Banking Acts of 1863 (originally known as the National Currency Act) and the National Banking Act of 1864, this new act was in acted to take the banking system out of the hands of the state government. “These acts encouraged the development of the national currency backed by the bank holdings of the U.S. Treasury securities...
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...Commercial Banks The commercial banks are the branch of the financial institution. They are vibrant for economy measurements of the country. There are many different kinds of banking system such as Unit, Branch, Group, Chain and Mix banks etc… However, only Branch Banking is practice in Bhutanese Banking System (Yangdon, 2018, p. ppt. 5). Thus, the different commercial banks in Bhutan are as following: 1. Bank of Bhutan (BOB) Bank of Bhutan is the oldest commercial bank in Bhutan established in 1968. Until 1982, Bank of Bhutan acts as central bank in Bhutan (Bank of Bhutan). Since 1997, the bank was incorporated as per the Companies Act of the Kingdom of Bhutan, 2000 and converted to public commercial bank. In 2007, the Druk Holding and Investment...
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...What do you mean by Bank? There is no unanimous opinion as to when and how the word “Bank” was derived. But it is assumed that this word derived from the ancient Latin words “Banco”, “Bangk”, “Bancus” and “Banque”. Meaning of these words is long bench. Once a class of people used to sit in the bench particularly in Lombardy street of Italy for taking deposit and lending money as a banking business. Definition of Bank: ➢ Different authors have defined the “Bank” in different ways with a common principle to accept deposit from the public and lending the same to the borrowers. ➢ Some important definitions are: ➢ “A bank is an establishment which trades in money, and establishment for deposit custody and issue of money, and also for granting loan and discounting bills and facilitating transmission of remittances from one place top another” …... from Imperial Dictionary. ➢ “An organization through which funds in the form of money or claim to money are assembled and transferred from those individuals and firms having a surplus of economic goods(as represented by such funds) to other individuals & firm whose needs for funds exceed their existing supply”..... from Rollin G. Thomas. ➢ “Banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise. ……………. from The Bank Company Act, 1991. Banker: ...
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...financial institutions, which act as a conduit for the transfer of resources from net savers to net borrowers, that is, from those who spend less than their earnings to those who spend more than their earnings. The banking institutions of India play a major role in the economy of the country. The banking institutions are the providers of depository and transaction services. These activities are the major sources of creating money. The banking institutions are the major sources of providing loans and other credit facilities to the clients. Apart from the banking financial institutions, there are a number of specialized financial institutions in India that have been incorporated for a definite purpose. These institutions include the insurance companies, the housing finance companies, mutual funds, merchant banks, credit reporting and debt collection companies and many more. Apart from these, there are several other financial institutions that are existing in the country. These are the stock brokers and sub-brokers, portfolio managers, investment advisors, underwriters, foreign institutional investors and many more. They are divided in two categories. The first type refers to the regulatory institutions and the second type refers to the intermediaries. * The regulators are assigned with the job of governing all the divisions of the Indian financial system. These regulatory institutions are responsible for maintaining the transparency and the national interest in the operations...
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...helps promote economic growth through competition. Law regulates social behavior, promotes social justice, and protects the environment. One primary function of law is peacekeeping. These laws provide guidelines for proper conduct in resolving disputes. Commerce Power Congress has the power to regulate commerce among the states. They exercise this broad power to pass laws regulating and affecting intrastate commerce in any way. This commerce power regulates persons and products related to the flow of interstate commerce. Congress has the authority to regulate channels of commerce such as railways, highways, and shipping vehicles. They also have the power to regulate any activity that has substantial economic effect on interstate commerce such as hotel and restaurant activity (Melvin, Chapter 2, 2011). Law Establishing Banking In 1791 President George Washington signed a bill establishing the Bank of the United States. The Bank of the United States or First Bank, the first federally chartered bank, opened for business in Philadelphia on December 12, 1791. Before this time each state had...
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...Reserve Bank of India: Functions and Working RESERVE BANK OF INDIA www.rbi.org.in ž¸¸£·¸ú¡¸ ¹£ö¸¨¸Ä ¤¸ÿˆ 2 Foreword The Reserve Bank of India, the nation’s central bank, began operations on April 01, 1935. It was established with the objective of ensuring monetary stability and operating the currency and credit system of the country to its advantage. Its functions comprise monetary management, foreign exchange and reserves management, government debt management, financial regulation and supervision, apart from currency management and acting as banker to the banks and to the Government. In addition, from the beginning, the Reserve Bank has played an active developmental role, particularly for the agriculture and rural sectors. Over the years, these functions have evolved in tandem with national and global developments This book aims to demystify the central bank by providing a simple account of the Reserve Bank’s operations and the multidisciplinary nature of its functions. The Bank today focuses, among other things, on maintaining price and financial stability; ensuring credit flow to productive sectors of the economy; managing supply of good currency notes within the country; and supervising and taking a lead in development of financial markets and institutions. The book serves to highlight how the Reserve Bank’s decisions touch the daily lives of all Indians and help chart the country’s economic and financial course. We hope that readers would find the book...
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...CATANDUANES STATE COLLEGES COLLEGE OF ARTS AND SCIENCES Virac, Catanduanes INTERNATIONAL BANKING: HISTORICAL SYNTHESIS OF THE BASIC PROBLEMS AND DEVELOPMENTS OF THE MONETARY AND CREDIT SYSTEMS DURING THE 19th AND 20th CENTURIES A requirement in English 2 ( Writing in Discipline ) Second Semester SY : 2012 – 2013 TF 7:00 – 8:30 am PRINCE JOHN A. ARCILLA AB – Economics 1 DR. YOLANDA T. TARIMAN PROFESSOR - ENGLISH II FEBRUARY 8, 2013 TABLE OF CONTENTS CONTENTS PAGE PRELIMINARY PAGE Title Page Table of Contents Outline CHAPTERS 1 Introduction Overview of the Topic 2 Discussion 3 Conclusion BIBLIOGPAPHY CURRICULUM VITAE ii INTERNATIONAL BANKING: HISTORICAL SYNTHESIS OF THE BASIC PROBLEMS AND DEVELOPMENTS OF THE MONETARY AND CREDIT SYSTEMS DURING THE 19th AND 20th CENTURIES Thesis Statement: Our historical synthesis focuses on the economic and political aspects of banking, with questions of industrial management and the credit economy taking second place. OUTLINE I CURRENCY AND MONETARY HISTORY IN THE 19th CENTURY 1 From Silver and Bimetal Currency to Gold Standard 2 The Development of the Bank Note into a Legal Tender A Bank Notes and Issuing Banks in England until Mid-19th Century B Peel’s Bank Charter Act C The Banque de France in the 19th Century D Overcoming the Federal System of German Issuing Banks E The United States’ Arduous Journey Towards the Federal System II BANKS AND BANKING FROM THE...
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...the United States economy in December of the same year, more than 9000 banks which is approximately 1/3 of the bank in the United States failed in the following 3 years. To reform the banking system and the United States economy, several acts passed including Banking Act of 1933 and 1935, Bank Holding Company Act of 1956, International Banking and Financial Institutions Regulatory, Financial Institutions Regulatory and Interest Rate Control Act and Right to Financial Privacy Act of 1978 between 1930’s and 1970’s as part of Depression era banking legislation. Each Act has its unique impact on the United States banking system and the economy. Also known as the Glass- Steagall Act, the Banking Act of 1933 main purpose was established Federal Deposit insurance Corporation (FDIC) as a temporary agency, separated commercial and investment banking as different lines of commerce and founded the Federal Deposit Insurance Corporation for insuring bank deposits. The Act has a significant impact on the U.S. banking system. The establish of the FDIC required all federally chartered banks and all state banks that were part of the Federal Reserve system to join and regulate by it. Moreover, the Act also permitted the Fed to allocate the currency. The FDIC insured bank deposits separated commercial banks from investment banks. Commercial banks were insured and allowed to accept deposits, but it couldn't underwrite or own any stock. Restrictions were placed by the Act on the assets...
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...Reserve System is the central banking authority of the United States It acts as a fiscal agent for the United States government and is custodian of the reserve accounts of commercial banks, makes loans to commercial banks, and is authorized to issue Federal Reserve notes that constitute the entire supply of paper currency of the country. Created by the Federal Reserve Act of 1913, it is comprised of 12 Federal Reserve banks, the Federal Open Market Committee, and the Federal Advisory Council, and since 1976, a Consumer Advisory Council which includes several thousand member banks. The board of Governors of the Federal Reserve System determines the reserve requirements of the member banks within statutory limits, reviews and determines the discount rates established pursuant to the Federal Reserve Act to serve the public interest; it is governed by a board of nine directors, six of whom are elected by the member banks and three of whom are appointed by the Board of Governors of the Federal Reserve System. The Federal. Qualifications. The Federal Reserve System exercises its regulatory powers in several ways, the most important of which may be classified as instruments of direct or indirect control. One form of direct control can be exercised by adjusting the legal reserve ratio (the proportion of its deposits that a member bank must hold in its reserve account), and as a result, increasing or decreasing the amount of new loans that the commercial banks can make. Because loans...
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...Banking in India From Wikipedia, the free encyclopedia Jump to: navigation, search Structure of the organised banking sector in India. Number of banks are in brackets. Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1770; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India in 1955. Contents [hide] * 1 History * 2 Post-Independence * 3 Nationalisation * 4 Liberalisation * 5 Adoption of banking technology * 6 Further reading * 7 References * 8 External links | [edit] History Merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India.(Joint Stock Bank: A company that issues stock and requires...
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