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Concept
Banking in the United States
Summary
In the United States, banking had begun by the 1780s, along with the country's founding. It has developed into a highly influential and complex system of banking and financial services. Anchored by New York City and Wall Street, it is centered on various financial services, such as private banking, asset management, and deposit security.
The beginnings of the banking industry can be traced to 1780 when the Bank of Pennsylvania was founded to fund the American Revolutionary War. After merchants in the Thirteen Colonies needed a currency as a medium of exchange, the Bank of North America was opened to facilitate more advanced financial transactions.
As of 2018, the largest banks in the United States were JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Goldman Sachs. It is estimated that banking assets were equal to 56 percent of the U.S. economy. As of September 8, 2021, there were 4,951 FDIC insured commercial banks and savings institutions in the U.S.
History of banking in the United StatesMerchants traveled from Britain to the United States and established the Bank of Pennsylvania in 1780 to fund the American Revolutionary War (1775–1783). During this time, the Thirteen Colonies had not established a currency, and used informal trade to finance their daily activities. On January 4, 1782, the first commercial bank in the U.S., Bank of North America, opened. In 1791, U.S. Treasury Secretary Alexander Hamilton created the Bank of the United States, a national bank intended to maintain American taxes and pay off foreign debt. However, President Andrew Jackson closed the bank in 1832 and redirected all bank assets into U.S. state banks. State banks began printing money rapidly, sparking runaway inflation and leading to the Panic of 1837.
Investment banking began in the 1860s with the establishment of Jay Cooke & Company, one of the first selling agents for government bonds. In 1863, the National Bank Act was passed to create a national currency and a federal banking system, and to make public loans.
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