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A RAPIDLY EVOLVING BANKING SYSTEM After the banking collapse of FREE BANKING BOOKS the 1930s, federal deposit insurance and the conservative attitudes of bankers who had survived the Great Depression helped to restore the banking system and lessen fears of future banking crises and depositor panics. This environment brought about a lengthy period of recovery. The next stage in U.S. banking history was initiated in the second half of the twentieth century, when the banking system found itself on the verge of many dramatic and innovative changes. {GOOGLEADS} Pathbreaking technological advances in communications and data processing were beginning to pave the way for a vast array of new financial services and instruments. In addition, these advances were breaking down many of the traditional barriers that had effectively limited competition between banks and other parts of the financial system. FREE BANKING BOOKS PDF Another result was to make multi-office banking much more feasible and desirable, thus helping to foster rapid banking consolidation and allow banking organizations to expand into new markets — either on an intrastate, interstate, or international basis. These recent advances have also enabled bankers to maintain better and more timely information on their operations and risk exposures, while creating a wider set of tools and instruments to address banking risks. FREE BANKING STUDY MATERIALS Overall, these changes have FREE BANKING BOOKS DOWNLOAD PDF brought about the most innovative and revolutionary period in U.S. banking history. At the same time, they have led to many corresponding changes in banking regulation. Although the basic structure of the regulatory agencies has largely remained intact, a number of bank regulatory constraints have undergone significant change. As shown by the following events and regulatory changes, much of this period can be charac-

Growth of bank holding companies One of the first significant changes BANKING BOOKS 2017-2018 was the growth of bank holding companies, which are companies that hold stock in one or more banks and may have certain other ownership interests as well. Although such companies were first formed in the early 1900s, most of the growth in holding companies has been fairly recent. Outside of some mild restrictions in the Banking Acts of 1933 and 1935, the first time bank holding companies received much legislative attention was in the 1950s. Only a handful of banking organizations were ready to capitalize on the holding company structure then. Several of those organizations, though, were able to use holding companies to create sizeable interstate banking and nonbanking networks, thus circumventing branching and business restrictions imposed on banks. This expansion prompted Congress to pass the Bank Holding BANKING STUDY MATERAILS Company Act in 1956, which placed the formation of multibank holding companies and their acquisition of banking and nonbanking interests under the control of the Federal Reserve. Under this act, bank holding companies could not acquire banks in other states unless specifically authorized by state law. Furthermore, any nonbanking activities of a bank holding company had to be closely related to the business of banking.

With this regulatory framework in place, large bank holding EXAM PREPARATION & TUTORING companies continued to expand their banking and permissible non banking activities, thereby leading the way to significant consolidation in the banking industry. Small and medium-sized banks also began making greater use of the holding company structure. Much of this interest was prompted by a 1971 tax ruling. This ruling permitted stockholders of closely controlled bank holding companies to service bank acquisition indebtedness with tax-free dividends from the bank. In response to such factors, holding companies have become, FREE DOWNLOAD FOR PDF by far, the most common form of bank ownership, with over 96 percent of all bank deposits under holding company control at year-end 1999.{GOOGLEADS} With bank holding companies coming under federal supervision, Congress also sought to place decisions on bank expansion through mergers under the control of the regulatory authorities. The Bank Merger Acts of 1960 and 1966 gave the surviving bank’s primary federal supervisor and the Department of Justice authority over bank mergers. To provide a consistent approach to holding company and merger decisions, Congress extended the same competitive and public benefits standards to both types of transactions.