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American Banks

One of the main reasons for establishing a US low tax company is for how much easier it is for an American company to open a corporate account with an American bank, which are amongst the most respected in the world.

The banking regulations in the United States differ significantly when compared to its counterparts in other parts of the world. Whereas countries like the United Kingdom have one bank regulator, Banks in the US are regulated at both federal and state level it also has separate securities, commodities and insurance regulatory agencies. Some individual cities also have their own financial regulation laws.

All commercial banks are required to obtain FDIC insurance under the Federal Deposit Insurance Corporation Improvement Act of 1989. This deposit insurance started in January 1934 and guarantees the safety of deposits in members banks up to $250,000 per depositor per bank, a similar system was adopted in much of Europe after the recent global crisis. Banks are not allowed to go bankrupt in the United States and any that are in danger of failing are taken over by the FDIC to be administered temporarily and eventually sold off or merged with other banks.

Whilst the structure of the Central Bank for the United States is considered unique among central banks what is also very unusual is that the United States Department of the Treasury is responsible for the printing of the money as opposed to the central bank.

Banking emerged in the United States as a way to finance the Revolutionary War after continental currency being issued had led to depreciation. It was decided to follow England’s example and the Bank of Pennsylvania was founded in 1780, but it would be superseded in 1781 by the establishment of the Bank of North America. By 1860 more than 10,000 different bank notes were circulated, this made commerce very difficult and counterfeiting was common, many banks failed as a result. Congress passed the National Currency Act in 1863 to deal with this problem. Since the 1940’s the growth in America’s banking has increased so significantly that it can be described as a financial evolution.

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