Journal Article

Interstate banking and the Federal Reserve: a historical perspective

Abstract: The U.S. banking system is unique in the industrialized world because it lacks nationwide banks. Historically, interstate banking was associated with other issues, such as monopolistic power and excessive political influence. This perception fueled public distaste for national banking. A more positive sentiment has emerged in recent years. Federal Reserve opinion evolved from one of strong opposition to interstate banking to one of acceptance. ; Clair and Tucker trace the rise and fall of opposition to interstate banking and explore banking developments during the twentieth century. They concentrate on the evolution of Federal Reserve policy regarding interstate banking. They conclude that policymakers now believe that small, locally owned banks and interstate banks can successfully coexist. They also suggest that continued introduction of interstate banking into the U.W. Banking system will help banks diversify and disperse risk, as well as benefit customers that operate nationally.

Keywords: Federal Reserve System - History; Interstate banking;


Bibliographic Information

Provider: Federal Reserve Bank of Dallas

Part of Series: Economic and Financial Policy Review

Publication Date: 1989

Issue: Nov

Pages: 1-20