The U.S. Banking Industry: Historical Overview

The Essential Primary Sources

Table of Contents

Origins

The Rise and Fall of the National Bank

The Maturation of the Banking Industry

Crises and Panics

The Birth of the Federal Reserve System and the Post-World War I Era

The New Deal and the Modern Banking System

Contemporary Crises and Challenges

Conclusion

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Abstract

The United States has been the world’s largest economy since 1890. The nation’s banking industry has played a major role in driving the U.S. economy, although the sector has faced repeated crises and problems. The U.S. banking industry evolved in a relatively unique fashion that combined both elitism and egalitarianism. While other nations developed a strong central bank to regulate and administer financial markets, the United States rejected that model and instead eventually settled on a much looser and less-centralized federated system known as the Federal Reserve System, or the Fed, comprised of twelve regional banks with substantial autonomy. The Fed has served as the backbone for the U.S. banking industry from its creation in 1913 onward.