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History of Banks, Credit Unions and Other Financial Institutions Institution Bank of North America 1st Bank of the United States (BUS) Coinage Act of 1792 2nd Bank of the United States Notes Andrew Jackson Age of “Free [Wildcat] Banking” National Banking Act (1863) National Banking Era Panic of 1907 Nov 2012 Founded under the Supervision of R__________ M_________ Created by Congress under ____________ of ____________ Issued paper money and ________ to foreign countries Closed for fear that ____________ investors would gain control Idea created by A__________ H___________ (loose interpretation of the Constitution) 1st Bank chartered by Congress from ______to ________ Located in ______________, PA (1st capitol of US) BUS was to: Establish a ________ Establish/control ________ to/from other nations Establish common _________ Control flow of currency Be controlled by _________ of ______________ Sell stock to financiers, but not Bonds Created ________ to create/distribute currency Established the ____________ as basis of US Currency Thoms Jefferson allowed 1st BUS to expire in 1811 James Madison renewed charter for 2nd Bank (______ to ______) Bank rechartered to help with ________ and ____ of _____debts Privately held bank (shares in bank sold to _____________) Bank received _________ for US Government (revenues) Legality upheld by McCulloch V ________ (1819) Disliked BUS Took _______ _________ from BUS and put them in “pet banks” 1836 2nd BUS went into bankruptcy, (N_______ _________), President 1837- 1862 State Banks operated under “free-banking” system, allowing competition and market forces to maintain stability Large banks emerged which filled the role of a central bank US mint still produced coins (specie) which states used as “payment” Created _________ Banks with standard Reserve rates Created standard c_______________ Created Office of ___________ to supervise banks Imposed a tax on state banks Eventually led to use of _________ ________ accounts (Checking) 1863-1913 Created by National Banking Act of 1863 Created uniform national currency (_______________) Number of state banks diminished rapidly Large banks issued securities (_________) to raise money to loan to customers Bank failures led US to consider the return of a central bank US was only country in world not to have a central bank Federal Reserve created in 1913 History of Banks, Credit Unions and Other Financial Institutions Federal Reserve Bank Bank (definition) Types of Bank Contracts Demand Deposit Cashier's Check Bank Note Counter Check Money Order Banking Terms Federal Funds Rate Fractional Reserve Rate Prime Rate FOMC Security Money Market Certificate of Deposit (CD) Savings Account Systemic Risk Inflation Monetary Policy Fiscal Policy Reserve Requirement Depository Institution Nov 2012 Private Organization, often called ____ branch of US Government Controls ________ policy of US Controls “______ rate” – interest rate banks use to loan money to one another Controls Treasury and Mint through ordering ___________ ______ Regional Banks Issues Treasury Notes Raises money through sale of _______, _______ and _______ An organization, usually a corporation chartered by a state or federal government, which does most or all of the following: receives ________ deposits and ______ deposits, honors instruments drawn on them, and pays ______ on them; discounts ________, makes _________, invests in _________; collects checks, _______, and________; ________ depositor's checks; issues drafts and cashier's checks.
