Brendan Greeley

1837, the banks blow up because of problems in the cotton market.

We get...

The new state banking laws, new reserve requirements, new state level controllers of the currency, bank reporting, what we think now as a call report.

You know, the idea that we have the right as a democracy to know what's on a bank's balance sheet.

We had to invent that.

1857, there's another panic by the time of the Civil War.

You know, often we talk about greenbacks coming out of the Civil War.

Far more important was a national bank charter.

So for the first time, the federal government is chartering private banks all over the country.

They can print bank notes, but they have to buy federal debt one-to-one.

It's the beginning of this back, you know, a dollar note must be backed by treasuries.

Again, there's many more panics, but 1907, there's copper market blows up in New York, banks fail all over the country.

We get the beginning of a process that gives us the Federal Reserve.

The Federal Reserve is just codifying practices that banks had already made to keep themselves safe.

You know, banks already had clearinghouses in big cities.

The banks in these systems took care of each other.

What the Federal Reserve did was it said, okay, this is a good practice, but we're going to make it national.

We're going to create one that's chartered by the federal government in every financial center.

So all of this stuff is a framework that we built up to support the value of commercial bank notes.

1932, again, you get this national panic.