Our Baffling Banking System
![handle is hein.journals/valr52 and id is 589 raw text is: VIRGINIA LAW REVIEW
VOLUME 52 May 1966 NUMIBER 4
ARTICLES
OUR BAFFLING BANKING SYSTEM
Howard H. Hackley*
In this first of two parts, the author traces the history of banking
regulation and the pattern of conflict that has developed in recent
years. After delineating the respective powers and duties of the
Federal Reserve Board, the Comptroller of the Currency, and the
Federal Deposit Insurance Corporation, Mr. Hackley examines the
clashes of jurisdiction and enforcement which have occurred
among these agencies. In the second part, to be published in the
June issue, the author will discuss proposals for resolving the
present confusion and conflict and make recommendations to
bring order to federal banking regulation.
INTRODUCTION
S INCE the days of Alexander Hamilton and Andrew Jackson, regula-
tion of banks in the United States has been marked by contro-
versy, conflict, and confusion. In recent years, however, controversies
and conflicts in this field have attained extraordinary proportions; and
it seems likely that major changes in our present bank regulatory
system-if it can be called a system-are in the offing. The purposes
of this Article are to relate the manner in which this system has devel-
oped, to describe the sources of the present confusion, and to analyze
proposals for changes in the system.
At the outset, it is important to note a basic fact that is largely re-
sponsible for the complexity of our banking structure. This is the fact
that the United States has four different classes of commercial banks'
* General Counsel of the Board of Governors -of the Federal Reserve System. B.A.,
1929, LL.B., 1931, University of Virginia; LL.M., 1932, Columbia University. The writer
is solely responsible for the views expressed herein and they do not necessarily reflect
the views of the Board of Governors of the Federal Reserve System or of any other person.
1 The term commercial bank is here used as meaning a corporation that engages in
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