Banking Blog

Bank heists, dollar bills, rappers and film stars, even the dollar sign itself – globally, no country’s money is as recognizable and popular than that of the United States of America. Across the world, kids dream of making it big in Hollywood, studying at Harvard, or becoming a sports icon like Michael Jordan. And sure, the dollar is a force to be reckoned with as well. But there is a lot of history and idiosyncrasy about this global economic powerhouse, and it needs to be looked at a little bit. This is not a breakdown of sociological causes of America’s wealth – it’s just a little peek into the workings behind the scenes of US Banks, and the role Americans play in keeping it rolling.

American banking goes back a very long time – as far back as 1780! This saw the first real attempt to create a “national bank”, but you have to remember that the war was still raging and the layout of the country was by no means what it is now. This started a trend of trying to merge banks together, instead of operating as smaller private businesses. Of course, the state structure that developed helped to bring these banks together under the auspices of general rules and regulation. Of course, the Wild West mentality was still firmly entrenched in the minds of some, and knocking over a small bank was not a serious issue. Once the banks became regulated under a kind of state law, they could get protection from state officials, work together to protect the funds, give bigger loans and so on.

So, it was the creation of the state structure that really kicked off the big banking revolution. Of course there were still banks that operated on a smaller, more specialized level, but they were generally governed by state offices. And so this system went on, and developed alongside the country itself. We have a movement from fragmented banking systems, towards unification and mutual cooperation.

The States grew, and settled and became fixed, and all was well. But banks could not be run on a state level anymore – someone had to take responsibility and make sure that some form of unity was evident in the country. After all, such a massive country had the ability and resources to ground out financial power, if the individual banking power of each source was harnessed.

So, the government stepped in and started passing national banking laws. The federal level is kind of like the umbrella that policies state financial and banking policies. By creating this ‘big brother’ effect, America has managed to harness the power of its size and economic richness, to become the world superpower that it is. And once again, this is from the movement towards unification.

Banking in the United States has that character, like every bank and every dollar is working together as part of a massive machine of wealth. But don’t be fooled, there are risks. Hiding under a giant is fine, because you are protected, until the giant slips up and squashes you…like the recession. And don’t forget that everyone wants to get one over on the champion.

So next time you are in a bank, or buying something, remember your role in the success of the US economy. Do your part, buy smart and bank smart, so that the country can look after its people and its banks.  Be thankful that US banks fight back on two fronts – federal and state – and try to teach your friends about banking structures. A little understanding really goes a long way. And we all need to lend a hand to keep the giant on our side.

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