New Era in Banking

April 26, 1985

Report Outline
Troubled Industry
Recent Changes
Consumer Issues
Special Focus

Troubled Industry

Recent Crises Despite Economic Recovery

Granite, windowless structures adorned at most with oversized Corinthian columns have for years identified banks as secure, unchanging institutions where people could safely deposit their earnings or take out loans. The local bank stood as a pillar of strength in the community, encouraging thrift by offering many of its services free of charge.

But all that is changing now. Bank failures are increasing at an alarming rate: the near-failure last year of the giant Continental Illinois National Bank and Trust Co. of Chicago was only the most spectacular incident in a growing list of crises in financial institutions that have been allowed to fail or been saved only by takeover by larger concerns. Until recently such failures were sporadic, and the banking system was widely considered safe from widespread runs.

That confidence was rudely shaken in March when Ohio Gov. Richard F. Celeste temporarily closed 71 privately insured savings and loans associations following a run on their deposits. For the first time since the Great Depression a large number of depositors—70,000—distributed across an entire state were denied access to their funds.

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Apr. 26, 1985  New Era in Banking
Nov. 18, 1983  Bankruptcy's Thriving Business
Aug. 07, 1981  Banking Deregulation
Jul. 19, 1974  Banking Stability
Jul. 17, 1968  Banking Innovations
May 06, 1964  Monetary Policy in Prosperity
May 16, 1940  Revision of the Securities Acts
Feb. 27, 1937  Expansion of Branch Banking
Sep. 03, 1935  The Decline of Commercial Banking
Dec. 11, 1934  Proposals for a Government-Owned Central Bank
Sep. 12, 1934  Bank Reserves and Credit Inflation
Nov. 27, 1933  Bank Credit in Depression and Recovery
Aug. 12, 1933  Closed Banks and Banking Reform
Apr. 04, 1933  Unified Control of Banking
Apr. 09, 1932  The Glass Banking Bill
Mar. 24, 1932  The Guaranty of Bank Deposits
Apr. 17, 1930  The International Bank and the Gold Standard
Feb. 08, 1930  Branch Banking and Chain Banking
Apr. 29, 1929  Mergers of Banking Institutions
Oct. 28, 1927  The Federal Reserve Rate Controversy
May 21, 1927  Labor Banking and Finance Since 1920
Jan. 31, 1924  The Northwestern Bank Failures and the Attack on Treasury Savings Certificates
Dec. 01, 1923  Why State Banks Do Not Join the Federal Reserve System, the Effect on the System and the Issues Involved
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Financial Institutions
Welfare and Welfare Reform