National bank
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The term national bank has several meanings:
- especially in developing countries, a bank owned by the state
- an ordinary private bank which operates nationally (as opposed to regionally or locally or even internationally)
In the past, the term "national bank" has been used synonymously with "central bank", but it is no longer used in this sense today. Some central banks may have the words "National Bank" in their name, but this has no particular significance.
United States historical usage
In U.S. economic history, a "national bank" may sometimes be distinguished from a "central bank", with the latter being considered as a privately-owned central bank, and the former as a government-owned one. The first U.S. national bank, called First Bank of the United States, was founded in 1791 due to the efforts of Alexander Hamilton, America's first Secretary of the Treasury. Later in 1816, partially due to Henry Clay's American System, a Second Bank of the United States was formed, but its renewal was vetoed in 1832 by President Andrew Jackson and it closed in 1836. The U.S. has not had a true national bank since that time; the current Federal Reserve is not a national bank.
External link
- Alexander Hamilton: FOR THE BANK (Feb 23 1791) (http://web.archive.org/web/20001110000000/www.ios.com/~alstone/forthebk.htm)
- James Madison Debates the Constitutionality of a National Bank (http://www.jmu.edu/madison/center/main_pages/madison_archives/era/parties/power/bank.htm)