Regulation and Australian Financial System

Objection to the bill was strenuous. Opponents argued that the incorporation of a national bank might have deleterious effects on the economy, and wondered whether or

1913: Federal Reserve Act made Federal Reserve Board to oversee national banking system with 12 regional districts, paper money issuance, and its-own central bank.

The validity of President Andrew Jackson’s response to the Bank War issue has been contradicted by many, but his reasoning was supported by fact and inevitably beneficial to the country. Jackson’s primary involvement with the Second Bank of the United States arose during the suggested governmental re-chartering of the institution. It was during this period that the necessity and value of the Bank’s services were questioned.

In response to this panic, a committee was established to find the flaws of the current banking system. This committee, the National Monetary Commission, found there were two main flaws dominating the system. First, the currency was not responsive to changes in demand. (Born...13). This meant that the bank had a fixed amount of currency, regardless of the

The Era of Good Feelings marked political history for the United States. This era occurred after the end of the War 1812. This reflected to America that we had a sense of a national purpose and had unity. President Monroe continued in the development of the policies that were set by James Madison in his President days. President Madison wanted to build an American System of national economic developments.

After the Civil War started, another need for a national bank emerged. The government wanted to learn from the mistakes of the first and second banks, so they developed the National Bank in 1869, which was modeled after the free banking system. This system allowed banks to choose between state and national charters. Though the bank was transformed into another bank in 1913, this was the United States first success at a uniform currency. Finally in 1913, the Federal Reserve was established. The architects of the federal reserve learned from the mistakes from the previous banks so that they could make this bank a success. This new federal reserve bank was given control over the nation’s payment system. The federal reserve was broken up into 12 District Banks that operated independently, so that there was not a concentration of power. Though not the original role of the Federal Reserve, today it is best known for the monetary policy. Today the federal reserve is run by the Board of Governors,which are seven members that are appointed by the President and are approved by the Senate. The Federal Reserve is composed of the Board of Governors, and twelve district

Congress granted the charter for a national bank that would be for 20 years in 1791. It was most likely because George Washington supported the bank, it got the charter which would be headquartered in Philadelphia. However, the president hesitantly signed the charter in realization that a bank was essential for the nation's economic

This was not the first attempt at centralized banking, Alexander Hamilton, the first Treasury secretary, expressed that a national bank would stabilize the new governments shaky credit and support a stronger economy. Hamilton faced opposition, primarily from the South, where lawmakers assumed a central bank would be beneficial only to the North. Hamilton would have his way and Congress would establish the Frist Bank of the United States in 1791. In 1811, the bank’s charter would expire and Congress would refuse to renew it by just one vote (Irwin, 2013). The Second Bank of the US would be necessary in 1816 as a result of the War of 1812. President Madison would realize that it would be too hard to fight a war without a national bank to fund the government. Again, in 1836, Andrew Jackson would be in office and see to the demise of the Second Bank.

Before the Federal Reserve Act was passed, the U.S tried many different things to create a banking system that worked. The first paper money was made to finance the American Revolution. The money was called "continentals". The fiat money notes were issued in such quantity they led to inflation, which, though mild at first, quickly accelerated as the war progressed. In 1791, congress created the First Bank of the United States. It was the

1863-1864, created a new national banking system which consisted of existing and newly formed banks joining if they had enough capital and to invest ⅓ of it in government securities. They would issue U.S. Treasury notes as currency in return.

During the twenty years it was in place the First Bank did change the economic downturn of the country after the war. The First Bank had branches in eight influential port cities and had a wide geographic existence. It influenced the lending policies of the state banks’ lending practices. The First Bank was like the state banks in that it made business loans, accepted deposits, and issued notes that circulated as currency and were convertible into gold or silver. But it differed from the state banks because its

The purpose of its creation was pretty straight-forward, that is, to prevent failures in banking (Meltzer & Allan, 2010). During the time of its inception, the United States had gone through a vicious banking crisis in 1907. The crisis gained importance as it was observed how Knickerbockers Trust failed to receive support from its peers, even after voluntarily seeking for it. It ultimately faced collapse due to failure in receiving support. This also had a significant influence on the psychology of the public as the peers of Knickerbockers apart from not recuing it, also cancelled payments to each other. The New York Stock Exchange collapsed by fifty per cent until liquidity was injected by the initiatives of financier J.P. Morgan which then relieved the situation to some extent. The legislators then in response vehemently advocated putting in place a central banking system, which would be able to provide liquidity in the case of a wholesale downfall. It can be said with hindsight that the machinery back then used to be very sophisticated. The Wall Street Journal also published a comprehensive fourteen-part series which emphasized on the need for a central banking system. The idea received further endorsements from the public groups and trade organizations. Hence the Federal Reserve was born. It was meant to be a politically autonomous institution that would provide stability to the financial system, protect the

One of the primary factors that can be attributed as to have led the recent financial crisis is the financial deregulation allowing financial institutions a lot of freedom in the way they operated. The manifestation of this was seen in the form of:

The bank was not a central bank; it just held an account for the government and had little control over the fiscal policies in each state. However, the state banks still resented the power that the bank had. This is extremely hard to comprehend when comparing the power of the First Bank and the current Federal Reserve System.

The Commonwealth Bank was discovered under the Commonwealth Bank Act in 1911 and started activities in 1912. Currently the firm has over 800,000 investors and 52,000 humans who are functioning under the company (Commonwealth Bank 2015). It has become the biggest bank of Australia provides product and services involving credit cards, Loans, saving accounts and transactions. The