U.S. Regional Branch Banking Is Approved (Great Events from History II: Business and Commerce Series)
Article abstract: By authorizing regional banking in the Northeast, Southeast, and West, national banking authorities took a step toward integrating the U.S. banking system through interstate branch banking.
Summary of Event
The appearance of what were known as regional compacts among banks in the 1980’s marked a point of evolution in the American banking system toward national branch, or interstate, banking. Establishing the exact time that interstate banking became more of a reality than a goal is difficult, as it occurred in incremental steps over the course of two hundred years, and against considerable opposition. Most authorities agree that major shifts occurred in the 1980’s thanks to the deregulatory mood that came to Washington with the administration of Ronald Reagan.
Since the creation of the First Bank of the United States in 1791, which permitted branch offices in several states, many financial thinkers have argued that branching constitutes the most efficient and flexible form of bank structure. Branches are offices that have full banking powers. They can take deposits, make loans, and deal in a variety of exchanges, but their assets and liabilities ultimately are consolidated with the parent bank and all other members of the bank’s branch system. Rather than appearing as those of a single bank, the assets of the branch will reflect those of the parent and all other branch offices....
(The entire section is 2288 words.)
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