Aftermath
Within forty years, Morgan had lived through three financial panics. He sought an end to these crises because the dollar was too unstable. Morgan suggested that Congress adopt a central bank similar to the United Kingdom's. Morgan's radical vision was to prevent future economic crises. Under the supervision of the Federal Reserve, shareholders would feel secure about the value of their assets—thus preventing future bank runs.
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"Bank of England" (Photo Courtesy of Telegraph Media Group Limited)
"For decades, a key difference between the U.S. and the European countries was that the U.S. did not have a central bank, and therefore did not have an institution that would be responsible as the lender of last resort" (Ghironi). |
(Interview at the Courtesy of Tom Cunningham from the Atlanta, Georgia Federal Reserve)
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"The real turning point in the crisis occurred when J.P. Morgan essentially forced the CEOs of the trust companies to form a rescue pool for their peers" (Bruner). |