On December 11, 1930 the Bank of United States failed setting off runs on numerous other banks that had refused to come to its aid. It was only one of the 352 banks that failed that month but its failure had worldwide repercussions, because many thought it was owned by the federal government. It was actually a relatively small state-chartered bank with slightly over $200 million in deposits located in New York City. But - it had an imposing name!
In the aftermath of that confidence shattering failure it was determined that no newly chartered bank would be allowed to use “United States” in its name. Of course that did not affect the Bank of America, which was already operating under that name.
Those now shouting fire in the bank theater would do well to read about the failure of the Bank of the United States. That bank was not nearly as large or as important as its name implied, but its failure helped usher in the last depression as it helped erode confidence at home and abroad.
By contrast, the Bank of America is a truly dominant bank that holds more than 10% of the total deposits of the entire banking industry. It claims that 50% of the people in the Unites States are customers of the Bank of America.
Those talking heads who daily spread the view that the Bank of America needs to be nationalized so that this economy can turn around are, at best, illinformed. They have no background in banking and they fail to appreciate the shock such an announcement would have domestically and internationally.
In the aftermath of that confidence shattering failure it was determined that no newly chartered bank would be allowed to use “United States” in its name. Of course that did not affect the Bank of America, which was already operating under that name.
Those now shouting fire in the bank theater would do well to read about the failure of the Bank of the United States. That bank was not nearly as large or as important as its name implied, but its failure helped usher in the last depression as it helped erode confidence at home and abroad.
By contrast, the Bank of America is a truly dominant bank that holds more than 10% of the total deposits of the entire banking industry. It claims that 50% of the people in the Unites States are customers of the Bank of America.
Those talking heads who daily spread the view that the Bank of America needs to be nationalized so that this economy can turn around are, at best, illinformed. They have no background in banking and they fail to appreciate the shock such an announcement would have domestically and internationally.
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