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Financial Reforms

Financial Reforms. Financial panics during the 1800’s people feared losing their money in the bank Withdrew $ from the bank. Panics led to bank’s and businesses collapsing Depression and recession triggered (high unemployment) . Reforms. Federal Reserve Act.

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Financial Reforms

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  1. Financial Reforms • Financial panics during the 1800’s • people feared losing their money in the bank • Withdrew $ from the bank

  2. Panics led to bank’s and businesses collapsing • Depression and recession triggered (high unemployment)

  3. Reforms

  4. Federal Reserve Act Brought stability to the banking system and prevented financial panics Created 13 Central Banks (Federal Reserve) The FED Lends money to member banks like PNC and TD Bank at low interest rates PNC and TD bank lend money to the public at higher interest rates Lending leads to spending, sparking an economy and leading to more hiring

  5. People feel safe to put their money in the bank and keep it there

  6. 16thAmendment (1913) • Graduated income tax (Underwood Tariff Act)

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