Bfs American Banking System

7/31/2019 Bfs American Banking System

1/27

Students of

Sybfm presents

To Kavita madam


2/27

Names Roll no.

Mithil Doshi 306

Vrajesh Karia 313Hardik Malde 314

Ronak Metha 316

Kirit Patel 324

Nilesh Prajapati 328

Munjaal Raval 329


3/27

Names Roll no.

Harshil Shah 333

Rushab Shah 338Smith Shah 340


4/27


5/27

The Suffolk System was the first effort toregulate private banking in the United

States. The Suffolk Bank of Boston first

established the Suffolk System in 1819and in 1824 six other Boston banks joinedthe system.


6/27

The Suffolk System was designed toprotect the public and Boston banks

from country banks that issued morebank notes than they could be countedon to redeem in gold and silver coin.


7/27
http://en.wikipedia.org/wiki/File:Elastic.JPG


8/27

Prior to 1838 bank charters in New Yorkwere granted by special act of the

legislature and in many cases they weregiven as patronage to political favorites.As a result of the bank monopoly thusdeveloped and the political abuses and

corruption attending it, there arose astrong sentiment in favor of a "freebanking" law.
http://chestofbooks.com/finance/banking/Money-And-Banking-Holdsworth/Part-II-Banking-Chapter-VIII-Origin-And-Development-Of-Ba.htmlhttp://chestofbooks.com/finance/banking/Money-And-Banking-Holdsworth/Part-II-Banking-Chapter-VIII-Origin-And-Development-Of-Ba.html


9/27

The National Banking Act of 1863,besides providing loans in the Civil War

effort of the Union included provisions: To create a system of national banks.

They had higher standards concerningreserves and business practices thanstate banks. The office of Comptroller ofthe Currency was created to supervisethese banks.
http://en.wikipedia.org/wiki/National_Banking_Acthttp://en.wikipedia.org/wiki/American_Civil_Warhttp://en.wikipedia.org/wiki/Union_(American_Civil_War)http://en.wikipedia.org/wiki/National_bankhttp://en.wikipedia.org/wiki/State_bankhttp://en.wikipedia.org/wiki/Comptroller_of_the_Currencyhttp://en.wikipedia.org/wiki/Comptroller_of_the_Currencyhttp://en.wikipedia.org/wiki/Comptroller_of_the_Currencyhttp://en.wikipedia.org/wiki/Comptroller_of_the_Currencyhttp://en.wikipedia.org/wiki/State_bankhttp://en.wikipedia.org/wiki/National_bankhttp://en.wikipedia.org/wiki/Union_(American_Civil_War)http://en.wikipedia.org/wiki/American_Civil_Warhttp://en.wikipedia.org/wiki/National_Banking_Act


10/27

To create a uniform national currency. Toachieve this, all national banks wererequired to accept each other's currencies

at par value. This eliminated the risk of loss incase of bank default. The notes wereprinted by the Comptroller of the Currencyto ensure uniform quality and preventcounterfeiting.

To finance the war. National banks wererequired to backup their notes withTreasury securities, enlarging the marketand raising its liquidity
http://en.wikipedia.org/wiki/Currencyhttp://en.wikipedia.org/wiki/Counterfeitinghttp://en.wikipedia.org/wiki/Counterfeitinghttp://en.wikipedia.org/wiki/Treasury_securityhttp://en.wikipedia.org/wiki/Treasury_securityhttp://en.wikipedia.org/wiki/Treasury_securityhttp://en.wikipedia.org/wiki/Counterfeitinghttp://en.wikipedia.org/wiki/Currency


11/27
http://en.wikipedia.org/wiki/File:Fed_Reserve.JPG


12/27

The Aldrich-Vreeland Act of May 30,1908, was passed in response to thePanic of 1907 and established theNational Monetary Commission, whichrecommended the Federal Reserve Actof 1913.

Nelson W. Aldrich was largely responsiblefor theAldrich-Vreeland Currency Law,and he became the Chairman of theNational Monetary commission.
http://www.worldlingo.com/ma/enwiki/en/May_30http://www.worldlingo.com/ma/enwiki/en/1908http://www.worldlingo.com/ma/enwiki/en/Panic_of_1907http://www.worldlingo.com/ma/enwiki/en/National_Monetary_Commissionhttp://www.worldlingo.com/ma/enwiki/en/Federal_Reserve_Acthttp://www.worldlingo.com/ma/enwiki/en/1913http://www.worldlingo.com/ma/enwiki/en/Nelson_W._Aldrichhttp://www.worldlingo.com/ma/enwiki/en/Nelson_W._Aldrichhttp://www.worldlingo.com/ma/enwiki/en/1913http://www.worldlingo.com/ma/enwiki/en/Federal_Reserve_Acthttp://www.worldlingo.com/ma/enwiki/en/National_Monetary_Commissionhttp://www.worldlingo.com/ma/enwiki/en/Panic_of_1907http://www.worldlingo.com/ma/enwiki/en/1908http://www.worldlingo.com/ma/enwiki/en/May_30


13/27

Mutual Saving Banks having surplus and

undivided profits were allowed to become

members of the Federal Reserve System.

Branch banking on the part of the National

Banks was permitting branches of State

banks.

Member Banks were Prohibited fromgranting loans to any person in amounts

exceeding 10 % of their unimpaired capital

and surplus.


14/27

The Federal Reserve Board was authorizedto refuse the accommodation to a bankfound to be using facilities of the Federal

reserve System for speculative purpose. A Federal open market committee was

created to coordinate the open marketoperations of the individual Federal Reservebanks and give the federal Reserve Board.

The Act forbade private banks whichconducted the business of underwritingand promoting the sales of the securitiesfrom acting as banks of deposits.


15/27

The supervisory powers of Fedral depositInsurance Co-orporation were considerablyenlarged.

The Fedral Reserve Board was organized in to aseven member Board of Governors. Thesecretary of the Treasury and the comptrollerof the Currency were eliminated from ex-officiomembership in order to lessening political

influence and making the board moreimpartial and disinterested. The Board of Governors was given undisputed

power over rediscount rates, Open MarketOperations and reserve requirements.


16/27

Federal Reserve banks were required tofollow the instructions given by the open

market committee composed of amajority membership of the board ofgovernors.

Certain technical changes wereeffected which enlarge the creditfacilities


17/27

Conducting nations monetary policy

Supervising and regulating

Maintaining financial stabilizing


18/27


19/27


20/27

Appointment of Board of governors arefor a period of 14 years and not eligible

for reappointment . The board of governors are selected by

President .

Enjoys extensive powers.


21/27


22/27

Act established in terms of section 8 ofthe banking act ,1933.

The act of 1935 gave them an enlargescope.

The committee consist of 7 board ofgovernors and 12 federal reserve bankpresident .

Meets 8 times in a year .


23/27

Supervision and control

Act as bankers bank and lender of last

resort . Not allowed to deal with individuals and

business house.


24/27

Has to make application to local federalreserve bank agent for required amount

of federal reserve notes. The agents has to notify the board of

governors every day.

25 % of reserve against deposit and noteliability


25/27

Primary motive .

Frequent used monetary policy .

Discount rates . Reserve requirements .


26/27


27/27

Bfs American Banking System

Documents

Transcript of Bfs American Banking System