The banking industry has changed throughout history from its first origins back in to the 1800s. It wasn’t until the early 1900s when the system we know today started the establishment of the Federal Reserve. The Federal Reserve enabled the banking industry to become prominent and longstanding with regulations, requirements and laws banks need to follow. The Federal Reserve has many roles and upholds its responsibilities throughout the toughest of times. Booms and busts in the economy are inevitable. It is a constant cycle of change but what matters is to the extent of the boom or bust. Since the early 1900s, the United States went through two of the worst recessions in history, the Great Depression and the 2008 financial crisis. Both of the crises played a major role on the banks and other financial industries within the industry. After the Great Depression, three of the most influential governmental organizations were established to shape the banking industry and financial system. After the 2008 crisis where many big investment banks fell, new regulations and laws were enacted in order to prevent another crisis to occur again. With the new laws and regulations, what will the banking industry be like in the future? The constantly changing technology we see today plays a huge role in the direction banks and financial institutions are headed.
The establishment of the Federal Reserve through the Federal Reserve Act of 1913 marks the start of the system of banking known today. Before 1913, banking in the United States dates back to 1791 with the establishment of the First Bank of the United States by Alexander Hamilton. Throughout the years of several booms and busts and frequent financial panic, banks failed and economic uncertainty grew. In 1907, a severe financial panic jolted Wall Street and forced many more banks into failure. This panic made many Americans realize the banking structure that had formed over the years was in need...