Matt Blogs!

Significant Legislation

Historically, legislation was introduced to resolve contemporary crises in the banking environment. With the passage of time, however, some acts have become less relevant in the current world. The following is a review of the major legislation that affects today’s banking industry and the impact of deregulation on cash management. Exhibit 8.3 (see the end of this section) summarizes the legislation that has been important in shaping the U.S. banking environment.

Federal Reserve Act of 1913
Established the Federal Reserve System, creating a central bank for the United States.

Edge Act of 1919
Permitted banks to conduct international business across state lines.

McFadden Act 1927
Prohibited branching and accepting deposits across state lines.

Glass-Steagall Act of 1933 (Banking Act of 1933)
Separated commercial banking from investment banking and established them as separate lines of business. It created the FDIC as a temporary agency to guarantee deposits. The act put in place interest-rate ceilings and prohibited the payment of interest on demand accounts.

Securities Laws of 1933, 1934 and 1940
Established the Securities and Exchange Commission (SEC) to supervise and regulate the securities industry.

Banking Act of 1935
Established the FDIC as a permanent agency of the government.

Douglas Amendment of 1956
Allowed banks to merge across state lines if jointly approved by individual states.

International Banking Act of 1978
Brought foreign banks within the federal regulatory framework. It required deposit insurance for branches of foreign banks engaged in retail deposit taking in the United States.

Taken From : Essentials of Managing Corporate Cash

Posted in General
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.