Uniform Bank Performance Report - Anderson School of Management

and successes. Each component of modern banking regulation is the result of a lesson learned by
bankers of the past. Unfortunately, as was demonstrated by the recent economic crisis, it is still an
evolving and imperfect system.
The five goals of banking regulation are what every financial regulatory act is based on. Some of the
most important acts attempting to uphold these ideals throughout history have been:
The National Currency Act of 1863, which established the charter system for national banks, as
well as created the Office of the Comptroller of the Currency (OCC).
McFadden Act of 1927, which gave states the right to individually regulate the ability of banks to
do business within and outside their territories.
The Glass‐Steagall Act of 1933, which split the financial services industry into three distinct
entities, commercial banks, investment banks, and insurance institutions. This act was designed
to decrease conflicts of interest and encourage the smooth flow of markets. It also created the
Federal Deposit Insurance Corporation (FDIC).
The Bank Holding Company Act of 1956, which limited the scope of services a specific type of
financial entity could provide. This act also introduced the legal concept of a “bank holding
company”, which lead to the existence of today’s “universal” banking giants such as JPMC.
The Gramm‐Leach‐Bliley Act of 1999, which repealed the Bank Holding Company Act and
loosened restrictions on banks that prohibited them from owning non‐banking subsidiaries.
And most recently, in 2002, the Sarbanes‐Oxley Act, which required public accountants to audit
financial institutions. This act was created in response to problems of corruption and accounting
fraud within financial institutions.
Regulation of JPMorgan Chase & Co.
After the repeal of the Glass‐Steagall Act by the Gramm‐Leach‐Bliley Act, JP Morgan & Co. was able to
acquire Chase Bank, creating what is now known as JP Morgan Chase & Co. Holding Company. Prior to
this, JPMorgan & Co. was simply a commercial bank, operating under the regulations set out by the
Glass‐Steagall Act. Now that it was a Financial Holding company it could branch its operations into new
lines of financial services such as: Insurance underwriting, securities dealing and underwriting, financial
and investment advisory services, merchant banking, issuing or selling securitized interests in bank‐